By Courtney Werning
The Financial Industry Regulatory Authority ("FINRA") announced
today that it has expelled broker-dealer Success Trade Securities, Inc.
and its CEO Fuad Ahmed for the fraudulent sale of promissory notes that
was nothing more than a
Ponzi scheme. In April 2013, FINRA issued a complaint against Success Trade Securities
and Ahmed charging fraud in the sales of promissory notes issued by the
firm's parent company, Success Trade, Inc.
FINRA found that from 2009 through 2013, Ahmed and Success Trade sold $19.4
million in Success Trade promissory notes to investors while omitting
material facts from the offering documents that would have revealed that
the parent company was in dire financial condition. Success Trade and
Ahmed also misrepresented to investors that the proceeds would be used
for business expenses to promote and build the parent company's businesses
when, in fact, the funds were used to make unsecured loans to Ahmed for
personal expenses and to make interest payments to existing noteholders.
In addition to the membership expulsion, the firm and Ahmed are jointly
and severally ordered to pay approximately $13.7 million in restitution
to 59 investors, the majority of whom were current and former NFL and