The case of a fallen “rockstar” advisor is highlighting the dangers of lending money to your clients – and not the more common violation of hitting them up for a loan.
An advisor who managed a number of NFL and NBA players has been barred for making unapproved loans to clients in a series of club ventures.
"From 2009 to 2013, Aaron Parthemer, an advisor for a number of NFL and NBA players who appears in photos with celebrities such as singers Chris Brown and Nicki Minaj, allegedly failed to disclose his involvement in the nightclub, Club Play, in Miami, in addition to an Internet branding startup and a tequila marketing operation," according to the settlement letter from FINRA.
Parthemer, who was at Morgan Stanley Wealth Management until 2011, made unapproved loans to clients in connection with the club, and referred clients to invest in the branding startup, Finra said.
From June 2009 through March 2013, Parthemer engaged in several undisclosed outside business activities, loaning nearly $400,000 to three firm customers without permission from his firm. What’s more, he presented an undisclosed private securities transaction in which eight firm customers ultimately invested more than $3-million.
According to FINRA documents, he also provided false information and false documents to Morgan Stanley, Wells Fargo and FINRA to draw loans for three professional athletes.
“From November 2011 through January 23, 2012, while Parthemer was registered with FINRA through an association with Wells Fargo, Parthemer loaned approximately $399,500 to three professional athletes who were owners of nightclub CP as well as customers of Parthemer at Wells Fargo,” the report says. “The purpose of the loan was to cover expenses related to the operation of (the nightclub).”
An attorney representing Parthemer, James Sallah of Sallah Astarita & Cox, said that his client was not an owner of the club, and never received compensation from the outside businesses. He is still owed money on some of the loans, Sallah said.
“This is a case where a broker did too much for his clients,” Sallah said.
"From 2009 to 2013, Aaron Parthemer, an advisor for a number of NFL and NBA players who appears in photos with celebrities such as singers Chris Brown and Nicki Minaj, allegedly failed to disclose his involvement in the nightclub, Club Play, in Miami, in addition to an Internet branding startup and a tequila marketing operation," according to the settlement letter from FINRA.
Parthemer, who was at Morgan Stanley Wealth Management until 2011, made unapproved loans to clients in connection with the club, and referred clients to invest in the branding startup, Finra said.
From June 2009 through March 2013, Parthemer engaged in several undisclosed outside business activities, loaning nearly $400,000 to three firm customers without permission from his firm. What’s more, he presented an undisclosed private securities transaction in which eight firm customers ultimately invested more than $3-million.
According to FINRA documents, he also provided false information and false documents to Morgan Stanley, Wells Fargo and FINRA to draw loans for three professional athletes.
“From November 2011 through January 23, 2012, while Parthemer was registered with FINRA through an association with Wells Fargo, Parthemer loaned approximately $399,500 to three professional athletes who were owners of nightclub CP as well as customers of Parthemer at Wells Fargo,” the report says. “The purpose of the loan was to cover expenses related to the operation of (the nightclub).”
An attorney representing Parthemer, James Sallah of Sallah Astarita & Cox, said that his client was not an owner of the club, and never received compensation from the outside businesses. He is still owed money on some of the loans, Sallah said.
“This is a case where a broker did too much for his clients,” Sallah said.
