Michael Milad Tanha (Tanha), a registered representative, settled a complaint with the Financial Industry Regulatory Authority (FINRA) that alleged he participated in several outside business activities and private securities transactions. Specifically, FINRA alleged Tanha solicited investment in a social media platform, a fitness center, life insurance policies, real estate referrals, etc. without notice to his firm. Based upon these allegations, FINRA suspended Tanka from the financial industry for 10 months and fined him $15,000.
Tanha (FINRA CRD No. 6022108) entered the financial industry as a general securities representative beginning in 2013. From 2014 to 2017, Tanka worked for and was registered with Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Merrill Lynch”). According to Tanha’s FINRA BrokerCheck report, Merrill Lynch allowed him to resign for engaging in undisclosed outside business activities, entering into a financial arrangement with a co-worker without management's knowledge or consent, and using his personal email address for business purposes. Thereafter, Tanha worked for Boulevard Family Wealth, until he was terminated when the misconduct described herein was revealed.
FINRA requires employees of FINRA-member firms to disclose all outside business-related activities, private transactions and all investments recommended to any customers to the member firm. The unlawful business practice of recommending investments outside of a financial advisor’s firm is often referred to as “selling away.” Outside business transactions and selling away are prohibited activities because they serve to undercut the supervisory system implemented by FINRA-member firms and FINRA itself to protect the investing public.
FINRA’s Department of Enforcement investigated Tanha and alleged he engaged in various outside business activities, including soliciting investments in a social media platform, a fitness center, and a life insurance policy, among other endeavors. For example, FINRA alleged Tanha co-founded a corporation created to enable its clients to communicate with celebrities on social media for a fee, and was the company’s treasurer, board member, and received 18% of the company’s stock. Importantly, Tanha also was involved in capital raising and soliciting investments from individuals.
Based upon the foregoing misconduct, FINRA alleges Tanha violated FINRA Rules 2010 and 3280, among others. For example, FINRA 3280 prohibits registered representatives from “participating in any manner in a private securities transaction” unless the registered representative provides written notice to the member, and where he is to receive selling compensation, the member has approved his participation in the proposed transaction. Here, Tanha engaged in multiple, undisclosed outside business activities, and therefore, violated FINRA rules.
Lufrano Law, LLC is a national investment litigation firm and has experience representing investors who have investment disputes with brokers and broker-dealers. Please contact us at (800) 627-2179 for more information if you have been the victim of investment negligence or fraud.
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