Illinois Advisor Receives Industry Bar Following Nearly $1 Million Theft from Elderly Clients
On September 28, 2021, former financial advisor Naseem Mohammed Salamah (Salamah, CRD# 4907349) was charged in a Complaint filed by the U.S. Securities and Exchange Commission (SEC) for allegedly stealing “at least $968,582 from three elderly advisory clients” and misappropriating the funds “on his own personal expenses and luxury items.” On September 30, 2021, Salamah submitted an Offer of Settlement, which the SEC accepted and whereby Salamah was permanently barred from the securities industry.
Salamah first entered the securities industry as a registered representative in 2005 and worked for several brokerage firms. From January 2013 until his separation from employment in May 2021, Salamah was affiliated with NinePoint Advisors (NinePoint) in that firm’s Rockford, Illinois and Loves Park, Illinois offices. According to BrokerCheck, Salamah received a suspension from the Financial Industry Regulatory Authority (FINRA) in 2014 – which was appealed. He also was fined by the Florida Office of Financial Regulation in 2019 – the findings of which Salamah neither admitted nor denied. More recently, Salamah was suspended by the Illinois Securities Department on July 26, 2021 and faces criminal charges filed by the U.S. Attorney for the Northern District of Illinois Western Division on September 29, 2021, related to the incident at hand.
As alleged by the SEC and the U.S. Attorney’s Office, between August 2017 and May 2021, Salamah falsely represented to three elderly clients that he was moving funds to diversify their holdings, but instead used altered authorization forms to move the funds to an account under his control. The monies, in turn, were allegedly used for personal expenses including vacations, cars, and school tuition. The SEC’s Complaint states that Salamah “chose these three elderly clients because he did not think they would pay too much attention to their brokerage account statements.”
Both the SEC and FINRA place a high priority on combatting fraud against senior retail investors. For example, the SEC maintains a robust initiative comprised of policy-making, staff interpretations, education, exams, and enforcement. FINRA recently amended its Sanction Guidelines, so that an investor’s age and physical or mental impairment will be considered in disciplinary cases. There also has been a significant increase in state-level enforcement actions related to protecting senior investors and vulnerable adults, with approximately 30 states having enacted legislation based on the NASAA Model Rule to Protect Vulnerable Adults from Financial Exploitation.
In addition to laws and regulations specifically protecting seniors, registered investment advisers (RIAs) and brokerage firms have an obligation to adequately supervise their employees. These firms must ensure that their representatives follow applicable securities rules and regulations, as well as adhere to internal firm policies. In those instances where a firm fails to supervise its representatives, it may be held liable for losses suffered by investors.
Investors who have suffered losses with their financial advisor may contact our office at (201) 771-1115 or info@gialawgroup.com for a free, confidential consultation to learn about their legal rights. The attorneys at Giarrusso Law Group LLC have extensive experience with handling all manner of claims on behalf of investors who have been victimized by securities fraud or related misconduct.