FINRA’s Department of Enforcement recently investigated Mirhashemi and found multiple acts of misconduct against his clients, most of whom were seniors. Specifically, FINRA alleged Mirhashemi churned customer accounts, engaged in excessive and unauthorized trading of customer accounts and made unsuitable recommendations to customers. According to FINRA, the customers were unsophisticated, and seven of the customers were seniors, including four in their eighties and one over 90 years old.
Although the investors were unsophisticated with moderate risk tolerances and 4-6 year investment time horizons, Mirhashemi made over 150 separate purchases of mutual fund “A” shares and sold them for those customers after an average holding period of less than six months. FINRA alleged these short-term mutual fund trades were both excessive and unsuitable and cost the 11 customers over $150,000 in overall commissions.
FINRA’s Department of Enforcement also found Mirhashemi exercised discretion on behalf of nine customers customers. Specifically, during his employment with Accelerated, Mirhashemi effected 2000 discretionary transactions in the securities accounts of his customers. FINRA alleged Mirhashemi exercised discretion in the customers’ account without written authorization, without designating the account as discretionary accounts, and without disclosing the nature of the relationship to Accelerated.
Based upon the foregoing misconduct, FINRA alleged Mirhashemi violated multiple federal securities laws and FINRA rules and regulations. FINRA contends Mirhashemi willfully violated Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and SEC Rule 10b-5 promulgated thereunder, and FINRA Rules 2010, 2020, and 2111. For example, FINRA Rule 2010 provides that a member, in the conduct of its business, shall observe high standards of commercial honor and just and equitable principles of trade. Here, Mirhashemi failed to observe high standards of commercial honor and just and equitable principles of trade, and therefore, was barred from the financial industry for life.
Lufrano Law, LLC is a national securities litigation firm and has experience representing investors who have investment disputes with brokers and broker-dealers. If you or someone you know suffered investment damages with Mirhashemi through Accelerated, you may be able to recover your losses through FINRA arbitration. Our firm only receives a fee if you recover money. Please contact one of our attorneys at (800) 627-2179 to schedule a free consultation or complete our free case evaluator.