Financial Industry Regulatory Authority has fined and suspended a former Purshe Kaplan Sterling Investments broker for raising $6 million from numerous investors through two Regulation D offerings that he managed without the firm’s knowledge or approval.
According to a letter of acceptance waiver and consent issued by FINRA, Xerxes Soli Mullan allegedly raised capital for a registered investment advisory firm, where he served as chief executive officer and was a majority shareholder.
Accoring to the RIA’s website, Mullan is the founder and CEO of Avestar Capital, a multi-family office and global financial advisory boutique.
FINRA claims that he and another broker solicited approximately $6 million in investments from 36 investors, none of whom were Purshe Kaplan customers. FINRA noted that Mullan did not receive any commissions from the sale of the securities.
In March 2017, FINRA claims that Mullan told Purshe about his role at the RIA, however, he did not provide prior written notice about his participation in the Reg D offerings.
In addition, he is accused of falsely certifying on the firm’s annual compliance questionnaires that he was not involved in any private securities transaction that had not been previously disclosed.
Mullan, who spent 13 years with Merrill Lynch before joining Purshe, voluntarily resigned in May 2019 after two years with the firm. Without admitting or denying the allegations, Mullan was suspended for two years and fined $10,000.