Allegation’s Seriousness, Case Information, and Impact on Investors
The allegations against Roshan Perera are particularly serious, especially considering their long-lasting impact on an investor. Perera reportedly refused to provide information during the Financial Industry Regulatory Authority’s (FINRA) investigation, receiving a ban from the securities industry as a result. This FINRA CRM reveals the magnitude of these charges.
Investors are often encouraged to be trusting and open-minded. “Do not be too timid and squeamish about your actions. All life is an experiment,” is an apt quote by Ralph Waldo Emerson that showcases this attitude. However, misplacing trust has arguably led to this investor transferring over $4.2 million to Perera. Unfortunately, the investor’s funds were allegedly misappropriated, used for personal expenses and day-trading.
The alleged high-level racket included the creation of fake account statements and confirmation notices to deceive the investor. This level of complexity often obfuscates the signs of misconduct until it’s too late. The resulting consequences for the victim include not only financial loss but the emotional distress caused by the betrayal of trust.
The Financial Advisor’s Background, Broker Dealer, and Past Complaints
Roshan Perera’s professional background, according to his FINRA BrokerCheck profile, reveals associations with multiple firms including AEGIS Capital Corp, Maxim Group LLC, and Stockkings Capital LLC. Each of these affiliations adds to his credibility and attractiveness to potential investors.
However, it’s crucial to remember that a broker’s credentials and associations do not necessarily equate to their ethical conduct. In fact, the securities world has a grim fact: according to research, up to 7% of advisors have misconduct records. This goes to show that while a broker’s resume may be glittering, it’s essential to conduct thorough background checks. These should include confirming their claims and digging into their past dealings.
Understanding FINRA Rule 3110
FINRA Rule 3110, often called the Supervision Rule, exists to ensure brokers and their associated firms work within the boundaries of securities laws and regulations. The goal of this rule is to protect investors from fraudulent activities and scams. Here’s how it works:
- Briefly, broker-dealer firms are required to establish a system that supervises their associated persons (brokers). The system should be capable of ensuring that persons comply with legal norms and guidelines.
- The firms are also obligated to set up a method that identifies and responds to potentially dubious activities that indicate possible violations or misconduct.
Unfortunately, in situations like Perera’s alleged fraud, despite such safeguards, fraudulent activities can occur. Failed supervisory systems may result in public harm, and in such cases, the firms may be held liable.
Consequences and Lessons Learned
Despite facing potential imprisonment for 20 years, perpetrators such as Roshan Perera represent a broader issue within the financial industry. Cases like these serve as a reminder for investors about the importance of thorough due diligence. When selecting financial advisors, one should not merely be wise, but also circumspect.
The situation serves as a reminder of how important it is to educate oneself. As an investor, you must familiarize yourself with the nature of your investments, the associated risks, and the people you trust with your money. As the saying goes, “A fool and his money are soon parted”. Therefore, making informed decisions and staying vigilant will help you to navigate the financial sector and prevent falling victim to such fraudulent schemes.
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