National investment fraud lawyers KlaymanToskes is investigating Ahmed G. Gheith (CRD# 5783951) of Ceros Financial Services after the broker and investment adviser was suspended from the securities industry by FINRA for an alleged securities act violation.
According to Gheith’s FINRA BrokerCheck, he has been registered as a broker and investment adviser with Ceros Financial Services’ Staten Island, NY branch, located at 323 Stewart Ave, since June 2021. Gheith was previously registered with Noble Capital Markets’ New York, NY branch from 2019 to 2021. Gheith was discharged from Paulson Investment Company in 2017 due to alleged violations of firm policy and FINRA rules.
If you suffered significant losses with Ahmed G. Gheith at Paulsol Investment Company, Ceros Financial Services’ Staten Island, NY branch and/or Noble Capital Markets’ New York, NY branch, contact securities attorney Lawrence L. Klayman at (888) 997-9956 or lklayman@klaymantoskes.com to discuss your recovery options at no cost.
Ahmed Ghassan Gheith entered into a Letter of Acceptance, Waiver, and Consent (“AWC”) with FINRA’s Department of Enforcement on December 16th, 2022 which states that Gheith is required to pay a fine of $7,500 and will remain suspended in all capacities from January 17th, 2023 to February 16th, 2023.
According to the AWC, between September 2019 and January 2020, Gheith allegedly used publicly-available information (such as accessing the Securities and Exchange Commission’s EDGAR filing system and locating stockholder lists) to cold-call and solicit 40 prospective investors to purchase private placement offerings which he claimed were exempt from registration under Rule 506(b) of Regulation D.
None of the 40 investors had previously invested in securities offered by Noble Capital and Gheith did not obtain investor questionnaires from the prospective investors prior to the time they agreed to invest in an offering. The AWC further alleges that 4 of the 40 investors Gheith solicited invested a total of $175,000 in one of the private placement offerings.
By soliciting the investors before creating a substantive relationship with them, Gheith engaged in general solicitation, meaning that the offers and resulting sales of the private placement offerings did not qualify for an exemption from registration under Rule 506(b) of Regulation D. Therefore, Gheith acted in contravention of Section 5 of the Securities Act of 1933 and violated FINRA Rule 2010.
Under the Securities Act of 1933, any offer or sale of a security must be registered with the SEC unless they qualify for an exemption or “safe harbor” from registration.
Regulation D under the Securities Act provides a number of exemptions, one of which is Rule 506(b), which allows an issuer to obtain a “safe harbor” under Section 4(a)(2) by selling to no more than 35 non-accredited investors and not using general solicitation or advertising to market securities. Gheith violated these provisions and rules by engaging in general solicitation and attempting to sell to more than 35 non-accredited investors.
Gheith also violated FINRA Rule 2010 as a result of this misconduct. FINRA Rule 2010 requires brokerage firms and their registered representatives to “observe high standards of commercial honor and just and equitable principles of trade.”
If you suffered investment losses or experienced broker misconduct with Ahmed G. Gheith at Paulson Investment Company, Ceros Financial Services’ Staten Island, NY branch and/or Noble Capital Markets’ New York, NY branch you are encouraged to immediately contact KlaymanToskes at (888) 997-9956 for a free consultation to discuss your legal options.
On April 24th, 2018, Ahmed Ghassan Gheith entered into a Letter of Acceptance, Waiver, and Consent (“AWC”) with FINRA’s Department of Enforcement in which he was required to pay a fine of $10,000, disgorgement of $31,055 and was suspended for one year from May 7th, 2018 to May 6th, 2019.
According to the AWC, while registered with Paulson Investment Company, LLC, Gheith was allegedly informed by two other brokers about a private offering related to a real estate development in Belize and the related fund Belize Infrastructure Fund I, LLC. The “private offering” was allegedly described as a short-term note that intended to raise money for the development of an airport in Belize.
The department’s investigation found that the brokers asked Gheith to refer any investors that may have an interest in the offering. Gheith allegedly knew the private offering was not an approved securities product being offered by his firm, and would be considered “selling away” from Paulson Investment Company, LLC. Additionally, the AWC alleges that the offering qualified as a security under the Securities Act of 1933 and the Securities Exchange Act of 1934.
From 2015 to 2016, Gheith allegedly contacted four Paulson Investment customers and provided them with a description of the private offering and solicited them to speak with the other broker about investing in the offering. The four customers collectively invested $3.5 million in the offering and Gheith was paid $93,165 by Canyon Acquisitions, LLC for soliciting and referring the customers.
According to the AWC’s findings, “the promissory notes did not fit into any category of non-securities notes, as they were sold to individual investors interested in profiting from the purchase of the notes, and were to be paid back in full plus 15% interest within three to twelve months.” Gheith’s alleged misconduct violated NASD Rule 3040 (Superseded by FINRA Rule 3280), FINRA Rule 3280 (Private Securities Transactions) and FINRA Rule 2010 (Standards of Commercial Honor and Principles of Trade). Gheith was discharged from Paulson in 2017 as a result of these alleged violations.
KlaymanToskes encourages investors who did business with Ahmed G. Gheith at Paulson Investment Company, Ceros Financial Services’ Staten Island, NY branch and/or Noble Capital Markets’ New York, NY branch to review their accounts for signs of broker misconduct and/or investment losses.
Investors that suffered significant losses should contact attorney Lawrence L. Klayman, Esq., at 888-997-9956, or lklayman@klaymantoskes.com to discuss their recovery options.
KlaymanToskes offers legal services on a contingency fee basis, meaning that we do not collect attorney’s fees unless we are able to obtain a financial recovery for you.
KlaymanToskes is a leading national securities law firm which practices exclusively in the field of securities arbitration on behalf of retail and institutional investors throughout the world in large and complex securities matters. The firm has recovered over $250 million in FINRA arbitrations and over $350 million in other securities litigation matters. KlaymanToskes has office locations in California, Florida, New York, and Puerto Rico.
KlaymanToskes, P.A.
Lawrence L. Klayman, Esq.
888-997-9956
lklayman@klaymantoskes.com
www.klaymantoskes.com