Injunctive relief, disgorgement, prejudgment interest, and civil penalties have been sought by the Securities Exchange Commission (SEC) in their complaint charging (now former) investment advisor Naseem Salamah with the violation of several federal securities laws.
Naseem Salamah Fraud Allegation
The action arises from allegations of Salamah having stolen over $968,600 from three elderly clients through actions taken between August 2017 and May 2021. Salamah, who has been charged with fraud, apparently deliberately zeroed in on these clients because “he did not think they would pay close attention to their brokerage account statements.”
On the pretext of moving their funds for the purpose of diversification of their securities holdings, he actually moved them into a bank account controlled by him. From there, the trail leads to the money being spent on luxury cars, private school tuition, and vacations. Allegations against Salamah also include forgery of the firm’s chief compliance officer on the funds’ transfer forms, in order to put a stamp of genuineness on the transactions.
In an effort to stem the questions that were raised by one of the affected investors, he provided concocted brokerage statements showing balances to be higher than they actually were. Even tax forms were not spared. He fabricated them for a client. The trigger for this was the taxes that became due to the IRS on account of withdrawals from the brokerage accounts. The trigger for the unraveling of the scheme appears to be the questions raised by the daughter of one of the impacted investors, about the withdrawals that seemed to be ‘significant,’ and not in line with expectations. That led to his access to client accounts being suspended and his services terminated by the firm he was associated with.
According to his BrokerCheck profile, he was fired from NinePoint Advisors in late May for allegedly “forging paperwork to have disbursements made from client accounts without their knowledge, and have the checks made out to a separate account which he controlled.” SEC has noted that Salamah’s affiliation between January 2013 and June 2021 was with a state-registered investment advisor. The advisor’s name, they note, is not mentioned in the complaint.
Salamah has consented to an injunction and to have the court consider the SEC’s claims for disgorgement, prejudgment interest, and civil penalties at a later date.
In a parallel action, the U.S. Attorney’s Office for the Northern District of Illinois has also filed criminal charges in the case.