Broker Pal of Bow Wow Gets Bitten by CFP Board
A flamboyant financial advisor who worked with professional athletes and hobnobbed with rap stars in Miami Beach has had his CFP certification permanently revoked.
Aaron Parthemer, who worked with numerous financial firms over the past 20 years, most recently with Wells Fargo Advisors, loaned nearly $400,000 to three clients, according to the CFP Board's disciplinary commission.
A high-profile figure in South Florida nightlife, who has been photographed with singer Chris Brown and rap star Bow Wow, Parthemer also participated in "at least three separate outside business activities" without receiving approval from his firm, the CFP Board found, and "falsely represented" that he was not doing so to his employer.
In addition, Parthemer presented "a private securities transaction" to clients, eight of whom invested in the securities, that he failed to disclose to his firm and falsely represented in a compliance questionnaire, according to the CFP Board.
What's more, last year FINRA barred Parthemer from associating with any FINRA member firm as a result of providing false information and documents. The CFP Board noted that he failed to disclose the FINRA investigation to the organization on multiple renewal applications.
Parthemer's CFP certification was revoked on January 4, 2016.
He was "permitted to resign" from Wells Fargo last year after his expulsion from FINRA. Parthemer headed a wealth management group at Morgan Stanley Smith Barney in Fort Lauderdale, Fla., with Sylvester King from two years, from 2009 to 2011.
CLIENTS 'TRUST AND LISTEN TO OUR ADVICE'
According to the law firm Fitapelli Kurta, a Morgan Stanley customer alleged that Parthemer recommended unsuitable investments and is seeking nearly $5 million in damages.
In a 2010 profile in Worth magazine, Parthemer claimed the net worth of his largest client was $300 million. Asked what makes a good client, he answered: "A person who trusts and listens to our advice, yet takes the time and effort to learn and understand all recommendations and why we make them."
Parthemer has also worked for Citigroup Global Markets, Bank of America Investment Services and Merrill Lynch.
Attempts to reach Parthemer for comment were not successful.
ETF TRADING MODEL AND FALSE CPA CLAIM CITED
The CFP Board also disciplined D. Robin Walker and James P. O'Hara.
Walker, a managing partner at Walnut Capital Management in Springfield, Mo., was issued a one-year suspension and consented to the CFP Board’s findings that he developed a proprietary trading model for ETFs.
Walker's firm, however, would not allow him to use the model with institutional clients and would not approve the formation of an RIA owned by Walker and his partners that would allow Walker to use the ETF trading model with all clients.
But Walker did ultimately form a RIA to use the model, which he and his partners owned through nominee owners.
The CFP Board determined that Walker breached his fiduciary duty to clients when he failed to disclose to his client who invested with his RIA: "material facts concerning the extent of his and his partners’ ability to direct RIA’s management and policies and existing and potential conflicts when advising clients to invest with RIA."
In addition, Walker and his partners "continued to seek approval from their firm to obtain ownership interests in RIA which, if obtained, would entitle them to share in any profits derived from the clients’ payment of advisory fees to RIA," the CFP Board said.
Walker also violated National Association of Securities Dealers and FINRA rules, the CFP Board determined. The SEC ordered Walker to cease and desist from committing or causing any future violations of the Investment Advisers Act of 1940 and ordered him to pay $60,000 in civil penalties.
FINRA suspended Mr. Walker for 18 months and fined him $20,000. The CFP Board determined that Walker’s conduct violated its standardsof professional conduct rules, providing grounds for discipline, suspending him until November 25, 2016.
Walker did not respond to requests for comment.
O'Mara, an accountant in York, Pa., had his CFP certification suspended for 90 days because he claimed he was a licensed certified public accountant but wasn't.
In addition to not having a CPA license, which resulted in a Pennsylvania Board of Accountancy Consent Order, O'Mara failed to update his Form U4 to reflect a "bankruptcy filing in a timely manner;" according to the CFP Board. He also "failed to report his bankruptcy to his employer," resulting in a Letter of Reprimand and $750 fine.
The CFP Board’s disciplinary commission accepted an offer of settlement in October 2015 and issued a 90-day suspension to O’Mara, which was effective until January 28, 2016.
O'Mara, whose name is still followed by the CPA acronym on several web sites, did not return a request for comment.