While associated with Gold Coast Securities, Farah persuaded Gold Coast customer LN to open an account at TD Ameritrade and to provide him with discretionary authority over that account. Farah promised that he would reimburse LN for any losses in her TD Ameritrade account and, in exchange, take a portion of the profits.There were, however, no profits. From November 2012 through October 2013, Farah excessively traded LN's TD Ameritrade account-executing more than 600 trades that caused LN's account value to diminish by more than 25 percent.Farah never informed Gold Coast that he had discretionary authority over LN's TD Ameritrade account. Nor did he inform Gold Coast that he had discretionary authority over four other TD Ameritrade accounts (belonging to three other individuals and one entity). To the contrary, on annual compliance questionnaires, he falsely denied having discretionary authority over any accounts.On these annual compliance questionnaires, Farah also falsely denied involvement in any business enterprise. He never disclosed to Gold Coast that he had established and co-owned a corporation, Farah & Neal, Executive Benefits/Wealth Management Inc. ("Farah & Neal Benefits") that was intended to provide financial advice to business owners.Through this conduct, Farah violated: (i) FINRA Rules 2111 and 2010, by excessively trading LN's account (First Cause of Action); (ii) NASD Rule 3050 and FINRA Rule 2010 by failing to notify Gold Coast that he had discretionary authority over five accounts and by failing to notify TD Ameritrade that he was a registered representative associated with Gold Coast (Second Cause of Action); (iii) FINRA Rules 3270 and 2010 by failing to disclose Farah & Neal Benefits as an outside business activity (Third Cause of Action); and (iv) FINRA Rule 2010 by providing materially false information to Gold Coast on its annual compliance questionnaires (Fourth Cause of Action).
Between 2014 and 2016, OPARA and Adindu participated in Business Email Compromise scams ("BEC scams") targeting thousands of victims around the world, including in the United States. As part of the BEC scams, emails were sent to employees of various companies directing that funds be transferred to specified bank accounts. The emails purported to be from supervisors at those companies or third party vendors that did business with those companies. The emails, however, were not legitimate. Rather, they were either from email accounts with a domain name that was very similar to a legitimate domain name, or the metadata in the emails had been modified so that the emails appeared as if they were from legitimate email addresses. After victims complied with the fraudulent wiring instructions, the transferred funds were quickly withdrawn or moved into different bank accounts. In total, the BEC scams attempted to defraud millions of dollars from victims.