Barred ‘Bada Bing’ Broker Gives Morgan Stanley More Headaches
More than three years after his bar from the brokerage industry, former Morgan Stanley broker Aaron Parthemer continues to create headaches for the firm.
Two more professional athletes filed claims against Morgan Stanley in July seeking almost $600,000 for failure to supervise Aaron Parthemer, the Florida broker with two decades of experience who socialized with a host of celebrity clients in the National Football League and the National Basketball Association.
Parthemer inveigled many of his clients to invest in a now-defunct Miami nightclub, Club Play, in 2010 and 2011. The latest to claim losses from investments that Parthemer allegedly pushed without approval from his firm came from Udonis Haslem, a power forward who is now a free agent, and Louis Delmas, who played six seasons with the Detroit Lions and Miami Dolphins before retiring in 2014.
Haslem, who hails from Miami and last played with the Miami Heat, is seeking $413,000 and Delmas is suing Morgan Stanley for $180,000 in arbitration, according to U-5 regulatory reports that the firm has filed on Parthemer. The suits do not name the broker because he has declared bankruptcy, said Chase Carlson, the Miami lawyer who represents the athletes.
Parthemer, who worked at Wells Fargo Advisors for three-and-a-half years after two-and-a-half years at Morgan Stanley, could not be reached for comment.
Morgan Stanley and Wells Fargo Advisors have paid at least $3.2 million to settle or satisfy claims seeking $16.8 million from Parthemer’s clients, according to information included on his BrokerCheck history.
Morgan Stanley in June paid $600,000 to settle a $1.6 million claim from Arizona Cardinals safety Antoine Bethea over an outside investment arranged by Parthemer. In May 2016 , NBA point guard Keyon Dooling and NFL offensive tackle John St. Clair were awarded $819,300 by a Financial Industry Regulatory Authority arbitration panel over investments in Club Play and other Parthemer recommendations.
A spokeswoman for Morgan Stanley did not immediately return a request for comment on the latest claims from Haslem and Delmas.
Parthemer, who began his brokerage career in 1994 at L.C. Wegard & Co. before moving on to six more firms over the next 19 years, was managing $250 million of client assets at a Wells branch in Fort Lauderdale at the time that the firm “permitted” him to resign” in April 2015, according to court filings. Finra barred him from working as a broker that same month, saying he engaged in several outside business activities without notifying or receiving approval from the firms he worked for. His illegal activities included raising about $3.1 million from customers in an undisclosed private security and lending customers almost $400,000, according to his BrokerCheck report.
James D. Sallah, a Boca Raton-based lawyer who has represented Parthemer, did not return a call for comment on the latest arbitration complaints from Haslem and Delmas.
Athletes have argued in earlier cases that Parthemer’s involvement in the nightclub “could not have been a secret” to Morgan Stanley. He celebrated a birthday there, married a club employee and conducted some of his brokerage business remotely from the club.
The Securities and Exchange Commission last year also barred Parthemer and fined him $160,000 over the outside and unauthorized business activities and investment solicitations. It also imposed a three-year bar on Sylvester King, Parthemer’s former partner at Morgan Stanley and Wells. It accused the two of raising $5 million from approximately 40 brokerage firm clients for investments in Global Village Concerns, a marketing venture, and fined King $80,000.
The National Football League Players Association, sparked by a spate of fraudulent investments made by members at the behest of financial advisors, has recently raised standards for advisors put on its “approved list” and created education programs to help members evaluate advisers.