April 11 Wall Street's industry funded watchdog
has charged a Washington, D.C.-based online brokerage with civil
fraud for selling investments in promissory notes to 58
investors, including many current and former professional
basketball and football players, the regulator announced
The Financial Industry Regulatory Authority (FINRA) also
ordered the firm, Success Trade Securities Inc, and its chief
executive, Fuad Ahmed, to temporarily stop selling the notes and
refrain from other alleged activities because the investors are
at risk of losing their money, according to a regulatory
document. The firm and Ahmed agreed to the order.
FINRA, in a civil complaint, alleged that Ahmed and Success
Trade Securities misrepresented to the athletes and other
investors that they were raising $5 million through the sale of
promissory notes, 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
Success Trade Securities and Ahmed did not immediately
return a call requesting comment.