The Financial Industry Regulatory Authority said Thursday that it had levied a temporary cease-and-desist order against Washington-based Success Trade Securities and its CEO and president, Fuad Ahmed, for fraud involving 58 investors, many of whom are current or former NFL and NBA players.
Ahmed and other registered reps at the firm sold more than $18 million in Success Trade promissory notes to 58 investors, many of whom are current or former NFL and NBA players, while misrepresenting or omitting material facts, FINRA said.
FINRA said Ahmed and the company agreed to the cease-and-desist order.
Many of the players involved were represented by Jade Private Wealth Management, which referred clients to Success Trade in exchange for kickbacks, according to Yahoo Sports, which has been investigating the matter for 18 months. Jade's client list fluctuated but has included Cleveland Browns cornerback Joe Haden, New York Giants wideout Victor Cruz and San Francisco 49ers tight end Vernon Davis, the site reported.
FINRA's complaint alleges that Ahmed and Success Trade Securities, an online broker-dealer, said they were raising $5 million through the sale of promissory notes—even as the sales exceeded the original offering by more than 300%. Most of the notes promised to pay an annual interest rate of 12.5% on a monthly basis over three years, with some notes promising to pay interest as high as 26%.
