In the sporting “hemisphere,” business is allowed. The recent growth of eSports would also suggest that this will be a breeding ground for profitable investments, but when this is done in a not so legal way, the necks of regulatory agencies will rise, and heads will begin to roll.
Chris Roumayeh, CEO of Renegade, has been referred to administrative proceedings by Financial Industry Regulatory Authority (FINRA) amid allegations regarding the organization ‘s offer for funding.
Ban and Penalty
FINRA has handed over Chris Roumayeh, CEO of Renegades, a 21 month ban on investments to the brokerage industry without making a disclosure. The ban was also levied on Wednesday for the recruitment and administration of Detroit-based funding, with a $15 000 (£12,309) penalty on Roumayeh.
The time between June 2014 and June 2018 is stated as the period when the infringement occurred while Roumayeh worked as the general stock delegate at Merrill Lynch, an American company for investment and asset management.
Although Renegades is not specifically alluded to in the disciplinary paper, Roumayeh notes that he has taken an interest in the sale of a company in the computer game business under which he served as a shareholder.
In September 2016, Renegades was acquired without informing the broking company, based on FINRA ‘s findings, by Roumayeh and an unidentified Merrill Lynch customer. Five companies linked to the activities of Renegade were also created to name Roumayeh to be their officer and CEO, as well as prospective investors. In March 2019, Roumayeh allegedly courted an investment of $5.5 million in the Renegades in return for stock in the Renegades from an unidentified publicly listed firm.
Also, in June 2014 and January 2015, Roumayeh found that it had formed two Real Estate Limited Liability Companies. The Michigan-registered LLCs, Real Estate LLC, and Roumayeh LLC appeal to him to be CEO of every single entity.
Without prior written approval from Merrill Lynch, Roumayeh had been found violating FINRA rules 3270, 3280, and 2010 by participating in these private security transactions and outside business activities.
In his capacity as owner, he was responsible for the daily operations of the Franchise, which in the disciplinary report are linked to language in rule 3270. The Policy forbids licensed Merrill Lynch Members, even in the case he has given the Member with a written notification, from operating or collecting rewards for another individual for any professional operation beyond the reach of the partnership to his / her Member. This is exacerbated by Rule 2010 that allows related individuals to conform with minimum levels of professional integrity and reasonable and equal trade values.
The report from the FINRA suggests that Roumayeh has not communicated to Merrill Lynch its external activities, including the acquisition and operation of the Franchise and the formation of its related companies and Real Estate LLC. Roumayeh also hid his connection with company entities by naming them as the sole authorized representative on account of Roumayeh LLC on behalf of his wife. For four regular enforcement questionnaires related to its business operations, Roumayeh often made erroneous statements to the Company.
Beasley Broadcast Group Inc., a radio station operator, located in Florida, has been listed as a foreign investor, and several workers in Renegades have recently quit the business due to mismanagement issues.
The letter from FINRA indicates that Roumayeh knew that Merrill had to apply for and receive written approved external operations because he had previously revealed one to the Company. Roumayeh also tried, by forming them under his wife’s name and naming her as the sole and authorized representative in his bank accounts, to obscure his relationship with the entities.
Brokers also often refused to comply with international regulations on company activities. Finra seeks to simplify them, even though it raises questions over the need for divulgation, so that businesses may track the possible financial effects of trading strategies on workers.
In July 2019, during an internal review, Merrill Lynch reported that Roumayeh resigned from the wirehouse because of the uncovered business value. While not a FINRA-regulated dealer any longer affiliates, it remains subject to the jurisdiction of the regulatory authority. According to the disciplinary letter, Roumayeh agreed to sanctions without accepting or denying the findings.