MFDA issues $115K fine, permanently bans advisor

By The IJ Staff | September 20 2019 01:30PM

The Mutual Fund Dealers Association (MFDA) issued its Reasons for Decision this week, in the case of Roman Vendrov. The documents allege that Vendrov submitted a line of credit application on his own behalf which contained false information, he fabricated supporting documents, then failed to cooperate with MFDA staff during the course of an investigation into his conduct.

Vendrov is permanently banned from conducting securities related business in any capacity with any MFDA member firm. He has also been fined $115,000 and ordered to pay the MFDA’s costs of $7,500.

According to the MFDA’s decision documents, Vendrov’s position changed as the case progressed. He ultimately claimed that another person was responsible for preparing the falsified and fabricated documents. Despite having signed the line of credit application, Vendrov claims he was unaware of their existence. The fabricated documents contained numbers that inflated the value of Vendrov’s holdings, while other documents were provided for accounts and assets that did not exist. The line of credit was ultimately approved. Vendrov obtained $49,386 from the line of credit, none of which has been repaid.

Explanations were unpersuasive in the extreme

The MFDA says Vendrov then failed entirely to cooperate with MFDA staff during its investigation. “Failing to cooperate with an MFDA investigation is a very serious misconduct which demonstrates a breach of a registrant’s obligation and illustrates that the registrant is ungovernable,” they write. “The respondent does not recognize the seriousness of his misconduct. He continued to deny any wrongdoing throughout. The respondent’s failure to provide information and documents to staff (and an almost complete failure to cooperate with staff) demonstrates his unwillingness to comply with the regulation of the securities industry and a lack of remorse. His belated explanations for these failures were weak and completely unpersuasive in the extreme.”

They add that Vendrov would pose a significant risk to other investors and the market at large if he were allowed to return to the industry and that a permanent prohibition is necessary to protect investors. Vendrov was terminated by Shah Financial Planning Inc. in November 2016 and is not currently registered in the securities industry in any capacity.

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