Young's professional basketball career has included stints with the
Indiana Pacers and San Antonio Spurs. He was among dozens of
investors who lost money after buying privately issued securities
sold by the now defunct Washington, D.C.-based brokerage, Success
The Financial Industry Regulatory Authority (FINRA) ejected the firm
and its chief executive from the securities industry in June after
ruling it ran a Ponzi scheme.
The private Wall Street watchdog also ordered Success Trade to pay
$13.7 million in restitution to the investors.
Some of the numerous current and former professional athletes who
lost money, including Young, have also filed individual securities
arbitration cases against Success Trade, former Chief Executive
Officer Fuad Ahmed and their former broker, Jinesh “Hodge”
FINRA arbitrators on Monday found Brahmbhatt liable in Young's case.
The ruling includes $1 million in punitive damages, a rare measure
aimed at punishing misconduct, lawyers said.
Young, who now plays for an Italian league, alleged civil fraud and
negligence, according to the FINRA arbitrators.
Efforts to locate Brahmbhatt were not successful.
Success Trade and Ahmed, who were also named in case, have settled
with Young, according to the ruling. The settlement terms are
unclear, and a lawyer for Success Trade and Ahmed declined to
Brahmbhatt, who did not respond to Young's arbitration case, agreed
to be barred permanently from the securities industry in 2013 after
failing to testify in the enforcement case against Success Trade,
according to a FINRA document.
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The June enforcement case against Success Trade focused on $19.4
million of promissory notes issued by the firm's parent company,
Success Trade Inc, to investors between 2009 and 2013. Ahmed and the
brokerage misrepresented or omitted material facts that would have
revealed the company's dire financial condition, according to FINRA.
Young's investments also included notes in an alarm system company
that turned out to be in poor financial shape, said Jeffrey Sonn,
whose law firm in Fort Lauderdale, Florida handled the arbitration.
"We're very pleased the arbitrator awarded punitive damages because,
at its heart, this was a scam of our client and many other
professional athletes," Sonn said. "These notes never should have
been offered to anyone."
(Reporting by Suzanne Barlyn.; Editing by Chris Reese and Andre
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