"Corcione defies prosecutors, envelopes the ACP in a cloud of corruption" (The Panama News / August 7, 2015)https://www.thepanamanews.com/2015/08/corcione-defies-prosecutors-envelopes-the-acp-in-a-cloud-of-corruption/"Alleged money launderers get off on someone else's plea" (The Panama News / October 7, 2016)
SIDE BAR: In an effort to flesh out the above bullet-points in this February 18, 2022, update, consider this supplemental explanation as set out in Candido Viyella, Plaintiff, v. Fundacion Nicor and Morgan Stanley Smith Barney, LLC, Defendants (Order, United States District Court for the Southern District of Florida, 19-CIV-25094 / February 28, 2020)http://brokeandbroker.com/PDF/ViyellaSDFL200228.pdf[Ed: footnote omitted]:
The Amended Complaint and Cross-Claim make the following factual allegations. Defendant Nicor was "[led] by" Nicolas Corcione Perez Balladares ("Corcione"), a "well-known real estate developer and construction entrepreneur" in Panama. (Am. Compl. ¶ 18 (alteration added)). "Corcione was desperate to 'park' his assets outside of Panama as those assets were at threat of being frozen by Panamanian regulatory authorities" because Corcione was under government investigation for various fraudulent activities. (Id. ¶ 19).Corcione contacted Viyella, a Morgan Stanley financial advisor, about becoming a customer of Morgan Stanley. (See id. ¶¶ 17, 20; Cross-Claim ¶ 12). "Viyella and his staff coordinated Corcione's customer application, but Corcione was affirmatively rejected as a Morgan Stanley customer in late 2015 . . . ."2 (Am. Compl. ¶ 20 (alteration added; emphasis omitted)). Morgan Stanley alleges it "determined to decline Nicor's account application in or about September 2015." (Cross-Claim ¶ 11). Morgan Stanley further alleges Nicor "never opened an account with Morgan Stanley" (id. ¶ 15), "never deposited any funds or securities with Morgan Stanley" (id. ¶ 16), and "never purchased any securities through or from Morgan Stanley" (id. ¶ 17)In the meantime, Viyella's family acquired a hotel property in 2013 through a series of entities. (See Am. Compl. ¶¶ 15-16). Terrena Properties LLC, an entity wholly controlled by Viyella's wife, partially owned CFLB Management LLC, which partially owned CFLB Partnership LLC, which in turn owned the hotel property. (See id.).To finance the construction of the hotel, CFLB Management issued promissory notes to "mostly foreign" investors. (Am. Compl. ¶ 14). Nicor purchased a promissory note issued by CFLB Management. (See id. ¶¶ 2, 17). According to the Amended Complaint, "[n]one of these foreign investors, including Nicor, were ever solicited by Viyella for investment in the [h]otel project in his role as a financial advis[o]r for Morgan Stanley." (Id. ¶ 17 (alterations added)). Corcione allegedly had been discussing potential investment opportunities with Viyella since 2011. (See id. ¶ 21).Nicor allegedly suffered losses from its investment in the CFLB Management promissory note. (See Am. Compl. ¶ 2). Seeking recovery of those damages and other relief, Nicor initiated FINRA arbitration against Viyella and Morgan Stanley on October 18, 2019. (See id. ¶¶ 1-2; Crossclaim ¶ 18). Nicor also brought an action in state court against CFLB Management and CFLB Partnership relating to the promissory note. (See Mot., Ex. 2, State Ct. Compl. [ECF No. 49-2]).B. Nicor's Statement of Claim before the FINRAAfter Nicor lost its investment on the CFLB Management promissory note, it initiated FINRA arbitration against Viyella and Morgan Stanley, alleging before the FINRA that Viyella, as a Morgan Stanley financial advisor and registered representative, induced Nicor to purchase a faulty promissory note, and Morgan Stanley violated its obligation to supervise its representative Viyella's activities. (See generally Mot. Ex. 1, Statement of Claim [ECF No. 49-1]). Nicor's Statement of Claim in the FINRA arbitration sets forth much of the same factual background as the Amended Complaint. (See generally id.).Nicor sought to open an account at Morgan Stanley and expressed to Viyella its interest in doing so. (See Statement of Claim 4). Nicor was familiar with Viyella because "Viyella is the financial advisor for many families in Panama." (Id.). In September 2015, a Morgan Stanley employee "who is part of Viyella's team at Morgan Stanley" emailed Nicor the papers Nicor would need to sign in order to open an account, including an International Account Application and Client Agreement, which Nicor signed and returned. (Id. 4-5). Viyella informed Nicor in October 2015 that its application was under review and had not yet been approved. (See id. 5).According to Nicor, Viyella and his wife formed Terrena Properties as a vehicle to invest in a hotel property. (See id. 3). CFLB Management issued a promissory note for $1 million to Nicor in November 2015, approximately two months after Nicor attempted to open the account at Morgan Stanley and one month after Viyella advised Nicor its application had not yet been approved. (See id. 17-24, Ex. 1, Demand Promissory Note). Viyella sent Corcione text messages recommending he purchase the promissory note (see Statement of Claim 5-6), characterizing it as "the best option for you" and a "very good investment" (id. 5 (internal quotation marks omitted)).Nicor claims Viyella engaged in "selling away, unsuitability, and fraud" in violation of the FINRA's rules (id. 2), and Morgan Stanley was "required to supervise Viyella's activities and is responsible for Viyella's violations of the FINRA [r]ules" (id. 8 (alteration added)). According to Nicor, the "FINRA has several [r]ules that address the violations by Viyella, and therefore Morgan Stanley." (Id. 8 (alteration added)).As to its claim of selling away, Nicor alleges Viyella violated the FINRA rules prohibiting a registered representative of a FINRA member from participating in outside business activity without notice to the member firm or participating in a private securities transaction. (See id. 8-9). As to the unsuitability claim, Nicor alleges Viyella violated the FINRA rule requiring a reasonable basis that a recommended transaction or investment strategy is suitable for the customer based on the customer's investment profile. (See id. 8). As to the fraud claim, Nicor alleges Viyella violated the FINRA rules requiring "high standards of commercial honor and just and equitable principles of trade" and prohibiting the effecting of a transaction through a "manipulative, deceptive, or other fraudulent device or contrivance." (Id.).Nicor claims Morgan Stanley is also liable for Viyella's unlawful activities. (See id. 8, 12, 14). Nicor alleges these violations as well as several other legal claims, such as breach of fiduciary duty, breach of a broker's duty to supervise and ensure compliance with firm and industry rules, negligent and intentional misrepresentation, and breach of contract and the covenant of good faith and fair dealing. (See id. 15). Nicor requests compensatory damages of $1 million and other relief. (See id.).at Pages 4 - 8 of the SDFL February 2020 Order
SIDE BAR: The FINRA RulebookFINRA Rule 0160: Definitions(a) The terms used in the Rules, if defined in the FINRA By-Laws, shall have the meaning as defined in the FINRA By-Laws, unless a term is defined differently in a Rule, or unless the context of the term within a Rule requires a different meaning.(b) When used in the Rules, unless the context otherwise requires:. . .(4) "Customer"The term "customer" shall not include a broker or dealer.FINRA Rule 12200: Arbitration Under an Arbitration Agreement or the Rules of FINRAParties must arbitrate a dispute under the Code if:
(1) Required by a written agreement, or(2) Requested by the customer;
[M]ovants' concern that Morgan Stanley would have to arbitrate unrelated disputes involving its employees is easily assuaged here. Movants fail to show the dispute between the parties here did not arise in connection with Morgan Stanley's or Viyella's business activities because, as stated, Nicor alleges Viyella provided him investment advice while Viyella was employed as a financial advisor at Morgan Stanley, and Morgan Stanley failed to supervise Viyella. (See generally Statement of Claim). Movants' proposed limitation of the business activities requirement risks blocking claimants from initiating FINRA arbitrations on selling away or negligent supervision claims because those claims necessarily involve activity not explicitly sanctioned by the FINRA member.Because Movants fail to carry their burden as to the first necessary element to obtain a preliminary injunction, they are not entitled to relief, and the Court need not address Movants' arguments on the remaining elements for preliminary injunctive relief. . . .
SIDE BAR:"Cannabis Science Case Smokes Definition Of Brokerage Customer" (BrokeAndBroker.com Blog / February 19, 2020)http://www.brokeandbroker.com/5074/lek-abbar-cannabis/http://www.brokeandbroker.com/5005/finra-gigi-jordan/"11th Circuit Rejects Mandatory FINRA Arbitration By Customers" (BrokeAndBroker.com Blog / September 25, 2018)
Registered representative terminated after allegations were made accusing him of participation in an outside investment involving clients for which the registered representative had a beneficial ownership interest.
1. The allegations reported by "MSSB": "Claimant alleges inter alia FA solicited outside investment opportunity in or about October 2015 that was not authorized by Firm."The "Product Type" is disclosed as "Promissory Note" and the alleged damages are disclosed as $1,000,000.00.The matter is reported as having settled on February 26, 2021, for $140,000 without any contribution by Viyella.2. The allegations reported by "MSSB": "Claimant alleges inter alia FA solicited outside investment opportunity in or about October 2015 that was not authorized by Firm."The "Product Type" is disclosed as "Promissory Note" and the alleged damages are disclosed as $500,000.00.The matter is reported as having settled on February 26, 2021, for $60,000 without any contribution by Viyella.
1. The allegations reported by "Morgan Stanley": "Claimants allege, inter alia, fraudulent misrepresentation with respect to outside investment opportunities not authorized by the firm that were solicited by the FA between 2013-2015."The "Product Type" is disclosed as "Promissory Note" and the alleged damages are disclosed as $2,000,000.00.The matter is reported as Docket # 2020-007502-CA-01 in the Circuit Court of the 11th Judicial Circuit in and for Miami-Dade County, Florida.2. The allegations reported by "MSSB": "Claimants allege, inter alia, FA solicited outside investment opportunity in or about October 2013 that was not authorized by Firm."The "Product Type" is disclosed as "Promissory Note" and the alleged damages are disclosed as $0.00.The matter is reported as FINRA Arbitration # 20-03478 filed on October 12, 2020.3. The allegations reported by "MS": "Claimants allege, inter alia, FA solicited outside investment opportunity not authorized by firm -- Oct 15, 2015 - Oct 18, 2019."The "Product Type" is disclosed as "Promissory Note" and the alleged damages are disclosed as $0.00.The matter is reported as FINRA Arbitration # 19-03149 filed on October 2, 2019.
On April 20, 2021, in connection with its investigation into whether Viyella participated in private securities transactions without providing prior written notice to Morgan Stanley, FINRA requested, pursuant to FINRA Rule 8210, that Viyella appear for on-the-record testimony. As stated by his counsel during a telephone call with FINRA on April 20, 2021, and by this agreement, Viyella acknowledges that he received FINRA's request and will not appear for on-the-record testimony at any time. By refusing to appear for on-the-record testimony as requested pursuant to FINRA Rule 8210, Viyella violated FINRA Rules 8210 and 2010.
Morgan Stanley fired Viyella, who was said to have generated around $5 million in annual revenue, in November 2020 for allegations that he participated alongside clients in an undisclosed outside investment, according to his BrokerCheck record. Finra barred him in May 2021 after he declined to cooperate with its investigation into the outside activities, according to BrokerCheck.Viyella then joined a multi-family office, BigSur Partners, where he sought to continue to work with some of his former clients as an unregistered "relationship manager." As part of his work, he and his sons wanted account statements, trade confirmations and other information so he could provide "money management and consulting services" to some of his former Morgan Stanley customers who wanted to work with him at BigSur.Morgan Stanley instead told his clients, who still maintained accounts at the wirehouse, that it would not be doing business with Viyella. It falsely "manufactured an administrative issue" in a letter to customers in which it told them that he would not be sharing any of their information, Viyella claimed.
Re: Your Request to Google [4-4682000032444]Inboxremovals@google.comTue, Feb 22, 9:34 PM (8 hours ago)to meHello,Pursuant to the counter notification you sent us, we have reinstated the following URLs:http://www.brokeandbroker.com/5101/finra-panama-arbitration/Regards,The Google TeamFor more information about our content removal process access g.co/legal.