Finra kicks out broker-dealer, bars CEO for Ponzi scheme that snared pro athletes

Firm, chief executive ordered to pay $13.7 million in restitution to 59 investors

Jun 25, 2014 @ 2:27 pm

By Mason Braswell

Finra has barred a broker-dealer and its founder for allegedly defrauding a number of current and former NFL and NBA players out of nearly $14 million as part of a Ponzi scheme.

The Financial Industry Regulatory Authority Inc. expelled Success Trade Securities, an online brokerage, and its founder, Fuad Ahmed, for raising money for the company parent company, Success Trade Inc., through purportedly fake promissory notes.

The notes typically had a 12.5% interest rate and had a term of 36 months, according to Finra. Because of the financial condition of the parent company, there was little chance they would be paid back, Finra said. Instead, the funds went to pay Mr. Ahmed's personal expenses, including the lease on a Range Rover and balances on personal credit cards and clothes, Finra alleged.

“No reasonable investor would have purchased the notes if the investor had known the truth about the parent company's financial situation,” Finra said in its decision.

He used $4 million from the notes to pay off early investors, according to Finra. The total amount of fraudulent notes he sold was $19.4 million.

The 59 people who invested with Mr. Ahmed were mostly “unsophisticated investors,” primarily recent college graduates starting a career as professional athletes, according to Finra.

Finra referred to the 59 victims only by initials.

A report from Yahoo Sports last year noted that clients who bought Success Trades' notes included Detroit Pistons guard Brandon Knight, Cleveland Browns cornerback Joe Haden, San Francisco 49ers tight end Vernon Davis, former Washington Redskins running back Clinton Portis and Chicago Bears defensive end Adewale Ogunleye. <>

When the notes became due, Mr. Ahmed attempted to persuade the investors to extend the terms, in some cases promising that the company would be listing on a European stock exchange soon.

Mr. Ahmed raised money for the notes through Jinesh Brahbhatt, a broker who also ran a registered investment advisory firm known as Jade Private Wealth Management. The firm targeted professional athletes who were waiting to be drafted, according to Finra.

Success Trade then paid Mr. Brahbhatt $1.25 million from the funds, according to the decision. Mr. Brahbhatt was barred in November for failing to testify in the case against Success Trade.

“There are a lot of elements about that which are in dispute, including whether those were payments or loans,” said Mr. Brahbhatt's attorney, Alan Futerfas. “We were not participants in this proceeding, so we did not have an opportunity to put evidence before the panel or address assertions made by either Finra personnel or Fuad Ahmed.”

An attorney for Mr. Ahmed, William C. “Skee” Saacke, did not immediately return a request for comment.

Finra had originally filed a complaint against Success Trade in April 2013 and issued a cease-and-desist order preventing the firm from raising additional funds at that time. The brokerage was still active online <>, however, as of press time.

Mr. Ahmed had been registered as a broker for 19 years, according to Finra. He had served at two expelled firms, including the infamous Stratton Oakmont Inc., where Finra said he met Mr. Brahbhatt. He was at Smith Barney Inc. for just over a year before leaving to start Success Trade Securities in 1998, according to Finra registration records.

A message left for Mr. Ahmed with an employee at Success Trade was not immediately returned.

As part of its decision, Finra said Mr. Ahmed must repay investors $13.7 million.

The restitution must be made by Sept. 11, 2014, according to Finra's decision. Mr. Ahmed has 45 days from the issuance of the decision to appeal the matter to Finra's National Adjudicatory Council.

A representative of the Securities and Exchange Commission could not be reached to address the issue of other actions that might be taken against Mr. Ahmed or Mr. Brahbhatt.

Success Trade Inc., the parent company of the expeled brokerage, owned two other online brokerage platforms, including and, which offer trades with commissions as low as $2.50. Just2Trade was ranked 17th in a ranking of online brokers by Barrons in March 2012, according to its website.


What do you think?

View comments

Recommended for you

Sponsored financial news

Upcoming Event

May 02


Women Adviser Summit

The InvestmentNews Women Adviser Summit, a one-day workshop now held in four cities due to popular demand, is uniquely designed for the sophisticated female adviser who wants to take her personal and professional self to the next level.... Learn more

Featured video


What's the first thing advisers should do when they get home from a conference?

After attending a financial services conference, advisers can be overwhelmed by options, choices and tools. What's the first thing they should do when they get back to their office?

Latest news & opinion

Speculation mounts on whether others will follow UBS' latest move to prevent brokers from leaving

UBS brokers must sign a 12-month non-solicit agreement if they want their 2017 bonuses.

Maryland jumps into fiduciary fray with legislation requiring brokers to act in best interests of clients

Legislation requires brokers to act in the best interests of clients.

8 apps advisers love for getting stuff done

Smartphone apps that advisers are using in 2018 to run their business more efficiently.

Galvin's DOL fiduciary rule enforcement triggers industry plea for court decision

Plaintiffs warned the Fifth Circuit that Massachusetts' move against Scottrade signaled that the partially implemented regulation can raise costs for financial firms.

Social Security underpaid 82% of dually entitled widows and widowers

Agency failed to tell survivors that they could switch to a higher retirement benefit later.


Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting It'll help us continue to serve you.

Yes, show me how to whitelist

Ad blocker detected. Please whitelist us or give premium a try.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print