FINRA has suspended financial advisor Rawad Roy Alame (CRD #5376696) from the securities industry for six months, fined $5,000, and ordered him to pay $2,700 to a former client. Rawad Alame was a stockbroker at Merrill Lynch, Pierce, Fenner & Smith Incorporated, working out of branch offices in Raleigh, North Carolina, and Provo, Utah, from January 2016 until June 2019. Mr. Alame’s employment was terminated by Merrill Lynch, which alleged that he completed an account-related document, signed by clients, to service a client’s account that was not held at Merrill Lynch and failed to be forthcoming with Merrill Lynch’s review of the matter.
Since leaving Merrill Lynch, Mr. Alame has been affiliated with Insight Advisors, LLC in Newtown, Pennsylvania, and Gate Key Financial, L.L.C., in Raleigh, North Carolina.
Mr. Alame and FINRA entered into a Letter of Acceptance, Waiver, and Consent (“AWC”) on December 21, 2020, over allegations that Mr. Alame participated in private securities transactions involving his management of a customer’s securities account held at another firm. Specifically, FINRA alleged:
- Alame recommended that his customer open a brokerage account at another FINRA member brokerage firm.
- Between February 2019 and July 2019, Mr. Alame recommended and executed 36 transactions in options securities in the account held away from Merrill Lynch.
- The transactions included $578,246 in options purchases.
- The customer paid Mr. Alame at least $2,700 in compensation for his purchase and sale activity in the outside account, which resulted in $107,195 in realized losses.
- Alame did not provide written notice to Merrill Lynch, or obtain the firm’s approval, prior to participating in these private securities transactions.
- Additionally, in April 2019, Mr. Alame falsely certified in response to a Merrill Lynch compliance questionnaire that within the last twelve months he had not been paid by any client for business conducted outside of Merrill Lynch, had not been given passwords to log into a brokerage account, and did not participate in any accounts with clients that were not approved by the firm.
When a financial advisor solicits a customer to participate in a securities transaction that is not offered or approved by the advisor’s employing brokerage firm, it is often referred to as selling away.
This blog has previously written about other recent selling away allegations: Future Income Payments, LLC.
Brokerage firms like Merrill Lynch must properly supervise financial advisors and customer accounts. Brokerage firms must also establish and maintain a reasonably designed system to oversee account activity, such as private securities transactions, to ensure compliance with securities laws and industry regulations. When a brokerage firm fails to supervise its financial advisors or the investment account activity sufficiently, it may be liable for investment losses sustained by customers.
If you have lost money with Rawad Roy Alame or Merrill Lynch, contact New York securities arbitration lawyer August Iorio of Iorio Altamirano LLP. August Iorio can be reached at firstname.lastname@example.org or toll-free at (855) 430-4010 for a free and confidential review of your account.
Iorio Altamirano LLP is a boutique law firm located in the heart of New York City. Iorio Altamirano LLP represents investors nationwide who have suffered investment losses due to securities fraud.