Kishan Parikh: Charged by FINRA? The Truth Exposed (2024)

September 23, 2023 59 0

Kishan Parikh Review 2024

Respondent Kishan, while associated with FINRA member Aegis Capital
Corp. (“Aegis” or the “Firm”), made unsuitable recommendations and excessively traded the
accounts of five of his customers, Customers A, B, C, D and E (collectively, the “Customers”)
from August 2014 through November 2016 (the “Relevant Period”).
controlled the trading in the Customers’ accounts and, during the Relevant Period, executed 442 trades with a total principal value of approximately $31.1 million.he excessive and unsuitable trading in the Customers’ accounts resulted in annualized turnover rates ranging from 10.9 to 199.8 and annualized cost-to-equity ratios (or break-even points) ranging from 27.5% to 59.7%, and caused
combined losses of more than $33,000. At the same time, his trading generated gross sales
credits and commissions of $179,112, of which he received at least $89,000. By engaging in
excessive and unsuitable trading in the Customers’ accounts, he violated FINRA Rules 2111
and 2010.
Also during the Relevant Period, he executed 53 trades with a total principal.
value of approximately $4.2 million in the accounts of Customers C and D without their prior
authorization. By engaging in unauthorized trading in Customers C and D’s accounts, he
violated FINRA Rule 2010

RESPONDENT AND JURISDICTION

he entered the securities industry in 2007. From May 2012 through April
2019,hewas registered with FINRA as a General Securities Representative through an
association with Aegis where he worked in the Firm’s Wall Street branch office.
In a Uniform Termination Notice for Securities Industry Registration dated April
3, 2019, Aegis reported he’s voluntary termination.
Although he is no longer registered or associated with a FINRA member firm,
he remains subject to FINRA’s jurisdiction for purposes of this proceeding pursuant to Article V,
Section 4 of FINRA’s By-Laws, because (i) the Complaint was filed within two years after April
3, 2019, which was the effective date of termination of he registration with Aegis; and
(ii) the Complaint charges he with misconduct committed while he was registered or
associated with a FINRA member.

Read About: Aegis Capital Corp

FACTS
I. Parikh’s Trading in the Customers’ Accounts

During the Relevant Period, he recommended active short-term trading.
combined with the use of margin. Although none of the Customers’ accounts was listed on
Aegis’s books and records as a discretionary account,he decided which stocks to buy and
sell and determined the volume and frequency of trading in each of the Customers’ accounts.
Parikh did not calculate cost-to-equity or turnover rates, or consider the
cumulative trading costs the Customers incurred when determining which stocks to buy and sell

Parikh also did not consider the interest costs associated with his use of margin, which allowed
him to trade more frequently and thus increased the costs the Customers incurred.

When Parikh did contact the Customers before making securities trades, the
Customers relied on and followed his trading recommendations.
However, Parikh frequently used time and price discretion when trading in the
account of Customer A and engaged in unauthorized trading in the accounts of Customers C and
D.
Parikh earned at least $89,000 from his improper trading in the Customers’
accounts during the Relevant Period.
II. Customer A
Customer A is a 64 year-old insurance and real estate agent who resides in Ohio.
During the Relevant Period, Customer A held two brokerage accounts at Aegis: an individual
brokerage account and an IRA account. Customer A opened these accounts in December 2012
after receiving a cold call from Parikh.
Customer A funded his Aegis accounts with approximately $115,000 in cash from
his savings. Aegis recorded Customer A’s investment objective for his individual brokerage
account as “growth,” and his risk tolerance as “low.” Aegis recorded Customer A’s estimated
annual income as $30,000, his liquid net worth as $10,000, and his total net worth as $100,000.
In November 2014, the value of Customer A’s individual brokerage account was
$21,273. From November 2014 through September 2015, Parikh executed 127 purchases and
sales of securities totaling approximately $15 8 million in Customer A’s account, at times relying
on time and price discretion, resulting in an annualized turnover rate of 199.8 and an annualized
cost-to-equity of 57.6.%. Although Customer A deposited a total of $69,100 in the account
during this period, by the end of September 2015, Customer A’s account had a value of $35,841.

Parikh’s excessive and unsuitable trading in Customer A’s brokerage account
during the period of November 2014 through September 2015 generated total trading costs of
$22,938, and caused losses of $61,260.
III. Customer B

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Customer B is a 55 year-old engineering contractor who first became a customer
of Parikh while Parikh was employed at a prior broker-dealer. In 2012, Customer B followed
Parikh to Aegis and opened a brokerage account. In August 2014, Parikh updated Customer B’s
new account form, recording Customer B’s annual income as $500,000 – $749,000, his liquid net
worth as $250,000 – $499,999 and his total net worth as $1,000,000 – $2,999,999. Parikh also
incorrectly recorded Customer B’s investment objective as “speculation” and his risk tolerance
as “maximum risk,” when Customer B was not a speculative investor with a high risk tolerance.
In August 2014, the total value of Customer B’s Aegis account was $19,034.
From August 2014 through September 2015, Parikh executed 71 purchases and sales of
securities totaling approximately $4 2 million in Customer B’s account, resulting in an
annualized turnover rate of 38.4 and an annualized cost-to-equity of 35.3%. By the end of
September 2015, the value of Customer B’s account was $30,392.84, consisting of $127,174 in
securities, a -$93,636.16 cash balance, and -$3,145 in short positions.
Parikh also engaged in in-and-out trading in Customer B’s account, including in
UA stock. For example:
a. On January 20, 2015, Parikh purchased 900 shares of UA, charging
$2,250 in markups. On February 4, 2015, Parikh sold 450 shares of UA, generating a
$2,313 profit while charging $450 in markdowns on the sale. The markups and
markdowns Parikh charged on the initial purchase and the subsequent sale represented
approximately 116% of the profits generated by the trades.

b. On August 7, 2015, Parikh bought and sold 1,500 shares of UA,
generating $424 in profit on the round-trip trade. Parikh charged $405 in markdowns on
the sale, or approximately 95% of the profits generated by the trades.
c. On August 24, 2015, Parikh bought and sold 1,000 shares of UA,
generating only $26 in profit and no sales compensation.
d. On September 8, 2015, Parikh bought and sold 600 shares of UA,
generating only $162 in profit and no sales compensation.

Parikh’s excessive and unsuitable trading in Customer B’s account during the
period of August 2014 through September 2015 generated total trading costs of $19,772, and
caused losses of $34,578.
IV. Customers C and D
Customers C and D reside in North Carolina. Customer C is 67 years old and the
president of a company that specializes in software sales and development; his wife, Customer
D, is 64 years old and a marketing officer.
Customers C and D opened a joint account with Parikh at Aegis in December
2012; their investment objective was recorded as “speculation” and their risk tolerance as “high.”
Customer C also opened an IRA account with Parikh at Aegis in February 2013.
The investment objective for Customer C’s IRA account was recorded as “growth,” and his risk
tolerance as “moderate.” Customer C and D’s annual income was recorded as $100,000 –
$199,999, their liquid net worth as $100,000 – $249,000, and their total net worth as $500,000 –
$999,999.
A. Parikh’s Trading in Customer C and D’s Joint Account
In August 2014, the total value of Customers C and D’s joint account was
$50,635. From August 2014 through November 2016, Parikh executed 85 purchases and sales of

securities totaling approximately $1 9 million in the account, resulting in an annualized turnover
rate of 12.1 and an annualized cost-to-equity of 48.4%. By the end of November 2016, the value
of the joint account was $17,660, consisting of $67,702 in securities, a -$46,305.74 cash balance,
and -$3,716 in short positions.

From April 2016 through February 2017, Parikh executed 24 transactions with a
total principal value of approximately $640,000 in Customers C and D’s joint account without
their prior knowledge or authorization. Parikh’s unauthorized trades are detailed in Exhibit A, a
copy of which is annexed hereto and incorporated herein by reference.
Parikh also engaged in in-and-out trading in Customers C and D’s joint account,
including in UA stock. For example:
a. On June 1 and 8, 2016, Parikh bought and sold 1,000 shares of UA,
generating a $1,390 profit. Parikh charged $250 in commissions on the purchase and
$1,500 in markdowns on the sale for a total of $1750, or approximately 126% of the
profits generated by the trades.
b. On June 14 and 20, 2016, Parikh bought and sold 1,000 shares of UA,
generating a $600 profit. Parikh charged $500 in markups on the purchase and $250 in
commissions on the sale for a total of $750, or 125% of the profits generated by the
trades.
c. On July 27 and August 5, 2016, Parikh bought and sold 1,200 shares of
UA, generating a $427 profit. Parikh charged $100 in commissions on the purchase and
$200 in commissions on the sale for a total of $300, or approximately 70% of the profits
generated by the trades.
6 6
securities totaling approximately $1.9 million in the account, resulting in an annualized turnover
rate of 12.1 and an annualized cost-to-equity of 48.4%. By the end of November 2016, the value
of the joint account was $17,660, consisting of $67,702 in securities, a -$46,305.74 cash balance,
and -$3,716 in short positions.
From April 2016 through February 2017, Parikh executed 24 transactions with a
total principal value of approximately $640,000 in Customers C and D’s joint account without
their prior knowledge or authorization. Parikh’s unauthorized trades are detailed in Exhibit A, a
copy of which is annexed hereto and incorporated herein by reference.
Parikh also engaged in in-and-out trading in Customers C and D’s joint account,
including in UA stock. For example:
a. On June 1 and 8, 2016, Parikh bought and sold 1,000 shares of UA,
generating a $1,390 profit. Parikh charged $250 in commissions on the purchase and
$1,500 in markdowns on the sale for a total of $1750, or approximately 126% of the
profits generated by the trades.
b. On June 14 and 20, 2016, Parikh bought and sold 1,000 shares of UA,
generating a $600 profit. Parikh charged $500 in markups on the purchase and $250 in
commissions on the sale for a total of $750, or 125% of the profits generated by the
trades.
c. On July 27 and August 5, 2016, Parikh bought and sold 1,200 shares of
UA, generating a $427 profit. Parikh charged $100 in commissions on the purchase and
$200 in commissions on the sale for a total of $300, or approximately 70% of the profits
generated by the trades.

Parikh’s excessive and unsuitable trading in Customers C and D’s joint account
during the period of August 2014 through November 2016 generated total trading costs of
$38,106, and caused losses of $14,863.
B. Parikh’s Trading in Customer C’s IRA Account
In August 2014, the total account value of Customer C’s IRA account was
$127,502. From August 2014 through November 2016, Parikh executed 108 purchases and sales
of securities totaling approximately $7.9 million in Customer C’s IRA account, resulting in an
annualized turnover rate of 10.9 and an annualized cost-to-equity of 27.5%. By the end of
November 2016, the value of Customer C’s IRA account was $187,379, consisting primarily of
6,000 shares of UA.
From May 2016 through November 2016, Parikh executed 29 transactions with a
total principal value of approximately $3 6 million in Customer C’s IRA account without his
prior knowledge or authorization. Parikh’s unauthorized trades are detailed in Exhibit A, a copy
of which is annexed hereto and incorporated herein by reference.
Parikh also engaged in in-and-out trading in Customer C’s IRA account, including
in UA stock. For example:
a. On December 2, 2015, Parikh bought 1,000 shares of UA, charging $1,500
in markups. On January 26, 2016, Parikh bought 900 shares of UA, charging $2,025 in
markups. Parikh sold the 1,900 shares of UA on January 28, 2016 for a loss of -$1,293
and charged $5,420 in markdowns on the sale, for total sales compensation of $8,945 on
the trades.
b. On May 16, May 20, and May 24, 2016, Parikh bought and sold 4,800
shares of UA, generating a $3,209 profit. Parikh charged $2,016 in markdowns on the
sales, or approximately 63% of the profits generated by the trades.

c. Between June 1 and June 23, 2016, Parikh bought and sold 7,500 shares of
UA, generating a $7,863 profit. Parikh charged a total of $9,700 in markups and
markdowns, or approximately 123% of the profits generated by the trades.
d. On August 8 and 11, 2016, Parikh bought and sold 2,500 shares of UA,
generating a $471 profit. Parikh charged $300 in commissions on the sale, or
approximately 64% of the profits generated by the trades.

Parikh’s excessive and unsuitable trading in Customer C’s IRA account during
the period of August 2014 through November 2016 generated total trading costs of $99,935.
V. Customer E
Customer E is a 66 year-old self-employed farmer with limited prior investment
experience. Customer E first opened an account with Parikh at Aegis in February 2013.
Parikh recorded Customer E’s investment objective as “speculation” and his risk
tolerance as “high” on Customer E’s new account form at Aegis even though his objective was
growth with a moderate amount of risk. As of August 2014, Customer E’s estimated annual
income was recorded as $200,000 – $299,999, his liquid net worth as $100,000 – $249,000, and
his total net worth as $500,000 – $999,999.
In August 2014, the total value of Customer E’s Aegis account was $37,192.
From August 2014 through July 2015, Parikh executed 51 purchases and sales of securities
totaling approximately $1.3 million in Customer E’s account, resulting in an annualized turnover
rate of 13.2 and an annualized cost-to-equity of 59.7%. By the end of July 2015, the value of
Customer E’s Aegis account was $47,124, consisting of $183,640 in securities, a -$130,791.17
cash balance, and -$5,725 in short positions.
Parikh’s excessive and unsuitable trading in Customer E’s account during the
period of August 2014 through July 2015 generated total trading costs of $31,131.

FIRST CAUSE OF ACTION
Excessive Trading/Quantitative Unsuitability
Violations of FINRA Rules 2111 and 2010

Enforcement realleges and incorporates by reference all preceding paragraphs.
FINRA Rule 2111, the suitability rule, is “fundamental to fair dealing and is
intended to promote ethical sales practices and high standards of professional conduct.” The
operable version of FINRA Rule 2111, Supplementary Material .05(c), that was in effect from
July 9, 2012 through June 29, 2020 required, among other things, an associated person “who has
actual or de facto control over a customer account to have a reasonable basis for believing that a
series of recommended transactions, even if suitable when viewed in isolation, are not excessive
and unsuitable for the customer when taken together in light of the customer’s investment
profile.” As set forth in Supplementary Material .05(c) of FINRA Rule 2111, “factors such as the
turnover rate, the cost-equity ratio, and the use of in-and-out trading in a customer’s account may
provide a basis” for finding quantitatively unsuitable trading.
Excessive trading occurs, and is unsuitable, when a registered representative has
actual or de facto control over trading in a customer’s account and the overall level of activity in
that account is excessive in light of the customer’s investment profile.
A violation of FINRA Rule 2111 also constitutes a violation of FINRA Rule
2010, which requires associated persons to “observe high standards of commercial honor and just
and equitable principles of trade.”
During the Relevant Period, Parikh excessively traded the accounts of Customers
A through E.
Parikh exercised de facto control over the Customers’ accounts, controlling the
volume and frequency of trading, deciding what securities to buy and sell, the quantities, the

price, and when each transaction would occur. Parikh also frequently made unauthorized trades
in the accounts of two Customers and utilized time and price discretion in another Customer’s
account.

Parikh’s trading in the Customers’ accounts was excessive and quantitatively
unsuitable, as evidenced by the annualized turnover rates and cost-to-equity ratios, the total
principal value and frequency of the transactions, the in-and-out trading, and the transaction
costs the Customers incurred. Parikh executed 442 trades with a total principal value of
approximately $31 1 million in the Customers’ accounts, resulting in annualized turnover rates
ranging from 10.9 to 199.8 and annualized cost-to-equity percentages (or break-even points)
ranging from 27.5% to 59.7%.
The high trading costs associated with Parikh’s intentional, active trading caused
the Customers to incur more than $179,000 in costs and more than $33,000 in losses, while
Parikh received substantial income from trading the accounts.
Parikh did not have a reasonable basis to believe that the level of trading he
recommended was suitable for each of the Customers.
As a result of the foregoing conduct, Parikh violated FINRA Rules 2111 and 2010.

SECOND CAUSE OF ACTION
Unauthorized Trading
Violation of FINRA Rule 2010

Enforcement realleges and incorporates by reference all preceding paragraphs.
Unauthorized trading occurs when a registered representative effects trades in a
customer’s account without first obtaining the customer’s authorization or consent.

Unauthorized trading is a breach of the duty to observe high standards of
commercial honor and just and equitable principles of trade and, thus, a violation of FINRA Rule
1. From April 2016 through February 2017, Parikh effected 53 trades in the accounts
  of Customers C and D without first obtaining authorization or consent for the trades from these
  customers. Parikh’s unauthorized trades are detailed in Exhibit A, a copy of which is annexed
  hereto and incorporated herein by reference.
By effecting 53 trades in the Firm accounts of Customers C and D without their
prior authorization or consent, Parikh engaged in unauthorized trading and violated FINRA Rule

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Help For Victims Of Kishan Parikh

If you have lost funds because of misrepresentation, unsuitable investment, or unsuitable investment strategy from Kishan Parikh. Then you can take legal action and get justice. Fraud, Malpractice & dereliction of duty should not be taken lightly, especially in this industry. We highly suggest that you notify authorities or seek legal action if your financial advisor or brokerage firm fails to abide by FINRA’s rules are regulations..

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Financial advisors are regulatory & legally obligated to suggest (recommend) the most suitable investments/investment strategies to their clients. Their suggestions should have their client’s best interests and should be appropriate for their client’s goals and needs. Similarly, the brokerage firm which hires financial advisors also has a regulatory & legal obligation to keep a close watch and supervise their Financial Advisors’ practices & behavior. They need to make sure that the financial advisor is not being manipulative or having an unreasonable bias towards certain investments. If the financial advisor and/or the brokerage firm breaches these duties, then the client/customer may be entitled to a full or partial recovery of their losses.

Financial advisors need to have the interest of their clients when giving suggestions related to investments and investment strategies. Reasonable basis suitability requires the advisor to do their best to analyze & identify the risks and rewards associated with their suggested investment and/or investment strategy.

Dr. Henrique J. Duck

Dr. Henrique Duck, PhD in Media Studies and Critical Theory, specializes in writing detailed critics stories and reviews. He has contributed to prominent newspapers and websites, providing insightful analysis of media content and its effects on society.