FINRA Suspends Former Northwestern Mutual Broker Over Customer Loans
From the desk of Jim Eccleston at Eccleston Law
The Financial industry Regulatory Authority (FINRA) has suspended and fined a former Northwestern Mutual broker after he solicited two customers for loans to purchase another representative's book of business but instead used most of the money to pay personal expenses and other debt, according to an Acceptance, Waiver, and Consent (AWC) letter.
According to ThinkAdvisor, FINRA imposed a 20-month suspension and $15,000 fine on Manish H. Shah for violating rules that prohibit brokers from borrowing money from customers without firm approval and FINRA Rule 2010, which requires brokers to maintain high standards of commercial honor.
ThinkAdvisor reports that Shah borrowed $75,000 from a brokerage customer in July 2016 and $200,000 from an insurance client in September 2018. He told both customers that he intended to use the funds to purchase another registered representative's book of business. Instead, FINRA said Shah used most of the proceeds to retire other debt and cover personal expenses.
Shah failed to repay the $75,000 loan according to the agreed repayment schedule. He repaid the loan in 2019 after Northwestern terminated him and the customer filed a complaint regarding the loan, according to the AWC.
ThinkAdvisor reports that Northwestern fired Shah on April 12, 2019, after placing him under internal review for "borrowing money from a client and other potential misconduct," according to the AWC. On July 18, 2019, Northwestern filed a Form U5 amendment disclosing a separate customer complaint that also involved a loan.
Shah began his brokerage career at Northwestern in 2003. According to ThinkAdvisor's review of BrokerCheck record, he has not registered with another FINRA member since leaving the firm. He currently serves as managing partner at River's Watch Capital Planning, a financial planning practice in New Hope, Pennsylvania, that he started in 2019, according to LinkedIn.
Shah settled the charges without admitting or denying the findings.
Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.
Tags: eccleston, eccleston law, finra, broker misconduct, northwestern mutual, customer loans, finra suspension





