NFL & NBA Players among 58 Victims of $18 MILLION Fraudulent Sales of Promissory Notes by D.C. SECURITIES FIRM

FINRA Department of Enforcement v. Success Trade Securities, Inc.
CRD Nos. 2404244 and 46027, Proceeding No.2012034211301, 4/11/2013

www.CharlesJeromeWare.com

Summary:

The Financial Industry Regulatory Authority (FINRA) has filed a Temporary Cease-and-Desist Order (TCDO) to halt further fraudulent activities by Washington, D.C.-based Success Trade Securities, Inc. and its CEO & President, Fuad Ahmed, as well as the misuse of investors’ funds and assets.

FINRA also issued a complaint against Success Trade Securities and Ahmed charging fraud in the sales of promissory notes issued by the firm’s parent company, Success Trade, Inc., in which Ahmed holds a majority ownership interest. FINRA filed the TCDO, to which Ahmed and the company agreed, thus immediately freezing their activities, based on the belief that ongoing customer harm and depletion of investor assets are likely to continue before a formal disciplinary proceeding against Success Trade Securities and Ahmed will be completed.

Success Trade Securities is an online broker-dealer that operates through Just2Trade and LowTrades. In its complaint, FINRA alleges that Success Trade Securities, Ahmed and other registered representatives at the firm sold more than $18 million in Success Trade promissory notes to 58 investors, many of whom are current or former NFL and NBA players, while misrepresenting or omitting material facts.

Specifically, FINRA’s complaint alleges that Ahmed and Success Trade Securities misrepresented that they were raising $5 million through the sale of promissory notes and continued to make this representation, even as the sales exceeded the original offering by more than 300 percent.

Most of the notes promised to pay an annual interest rate of 12.5 percent on a monthly basis over three years, with some notes promising to pay interest as high as 26 percent.

FINRA also alleges that Ahmed and Success Trade Securities failed to disclose the amount of the company’s existing debt to investors and that it was unable to make future interest payments without raising money from new investors. In addition, FINRA charges that Ahmed and Success Trade Securities misrepresented how the proceeds would be used, instead improperly using the funds to make unsecured loans to Ahmed and to make interest payments to existing noteholders. FINRA further alleges that Ahmed and Success Trade Securities misrepresented the rate of return and exempt status of the private placement offering through which the notes were sold.

Under FINRA rules, the individuals and firms named in a complaint can file a response and request a hearing before a FINRA disciplinary panel. Possible sanctions include a fine, an order to pay restitution, censure, suspension or bar from the securities industry.

The issuance of a disciplinary complaint represents the initiation of a formal proceeding by FINRA, in which findings as to the allegations in the complaint have not been made, and does not represent a decision as to any of the allegations contained in the complaint.

[http://www.lawupdates.com/print/5093/April 22, 2013/NFL & NBA Players Among 58 Victims]

Attorney Charles Jerome Ware is renowned and consistently ranked among the best attorneys and legal counsellors in the United States. [GQ Magazine, The Washington Post, The Baltimore Sun, The Columbia Flier, USA TODAY, The Howard County Sun, The Anniston Star, The New York Times, et al.]