Exclusive: Ex-broker must pay $2 million to former NBA player

Mon Nov 24, 2014 8:29pm EST
 
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By Suzanne Barlyn

(Reuters) - A former securities broker that regulators said took part in a multi-million dollar fraud against professional athletes must pay $2 million to former NBA player Sam Young, an arbitration panel ruled on Monday.

Young's professional basketball career has included stints with the Indiana Pacers and San Antonio Spurs. He was among dozens of investors who lost money after buying privately issued securities sold by the now defunct Washington, D.C.-based brokerage, Success Trade Securities.

The Financial Industry Regulatory Authority (FINRA) ejected the firm and its chief executive from the securities industry in June after ruling it ran a Ponzi scheme.

The private Wall Street watchdog also ordered Success Trade to pay $13.7 million in restitution to the investors.

Some of the numerous current and former professional athletes who lost money, including Young, have also filed individual securities arbitration cases against Success Trade, former Chief Executive Officer Fuad Ahmed and their former broker, Jinesh “Hodge” Brahmbhatt.

FINRA arbitrators on Monday found Brahmbhatt liable in Young's case. The ruling includes $1 million in punitive damages, a rare measure aimed at punishing misconduct, lawyers said.

Young, who now plays for an Italian league, alleged civil fraud and negligence, according to the FINRA arbitrators.

Efforts to locate Brahmbhatt were not successful.   Continued...

 
Indiana Pacers' Sam Young (3rd R) and teammates celebrate after Paul George made a game-tying three point shot to end regulation time during Game 1 of their NBA Eastern Conference final basketball playoff against the Miami Heat in Miami, Florida May 22, 2013. REUTERS/Joe Skipper