If you have suffered investment losses with Kinan Nimeh, formerly a financial advisor with McBarron Capital, please call 1-866-817-0201 to discuss with a lawyer your rights for recovery of those losses. Recently Nimeh has entered into a settlement with FINRA, the regulator that oversees securities brokerages, concerning allegations of serious regulatory violations. That settlement states the following:
FINRA Rule 2111(a) provides: “A [financial advisor] must have a reasonable basis to believe that a recommended [investment] transaction or investment strategy involving a security or securities is suitable for the [investor utilizing the advisor's services], based on the information obtained through the reasonable diligence of the [brokerage or advisor] to ascertain the customer’s investment profile.”
In June 2009, FINRA advised all brokerages through a notice concerning Non-Traditional ETFs that “[d]ue to the effect of compounding, their performance over longer periods of time can differ significantly from the performance…of their underlying index or benchmark during the same period of time.” Because of these risks and the inherent complexity of the products, FINRA Regulatory Notice 09-31 advised securities brokerages and their adivsors that Non-Traditional ETFs “typically are not suitable for retail investors who plan to hold them for more than one trading session, particularly in volatile markets.”
During the Relevant Period, Nimeh recommended approximately 52 NonTraditional ETF purchases in 29 customer accounts. These types of investments were not meant to be held for extended periods. In fact, the prospectuses for the NonTraditional ETFs recommended by Nimeh warned that the ETFs were intended to be used as short-term trading vehicles, not long-term investments. Despite the warning in the prospectuses; however, Nimeh recommended that the Non-Traditional positions be held in these customers’ accounts for between 62 and 176 days with the averaged holding period was 130 days. This is much longer than is suitable for such investments.
Nimeh did not have reasonable grounds for believing that these recommendations were suitable, according to the settlement. As such, the settlement states, the sale of the securities are in violation of FINRA regulations and investors of Nimh may be entitle to recovery of the losses if they invested in ETFs with Nimeh.
Nimeh consented to the settlement without admitting or denying the findings.