Ex-Advisor Racks Up $16M in Client Complaints
One barred advisor. Fourteen client complaints. $16 million in alleged damages.
Troubles are mounting for Enver Rahman Alijaj, a former advisor who has been hit with 14 customer complaints that allege a total of $16 million in damages, according to FINRA records. In the most recent case against him, an arbitration panel ordered him to pay two former clients $275,000.
"I've never seen a broker that has as many complaints," says Lars K. Soreide, an attorney representing the clients, who sought damages for alleged churning, excessive use of margin and overly concentrating their portfolio.
Alijaj was working at Legend Securities, a brokerage and investment banking firm based in New York, at the time of this alleged wrongdoing, which led to a complaint filed with FINRA in January 2013.
During the ensuing case, Alijaj failed to show at arbitration hearings and did not have an attorney representing him, according to FINRA records. The firm did not return calls or emails seeking comment.
Alijaj faces similar allegations of misconduct in over a dozen client complaints that span his time at multiple firms since he entered the industry in 2005, records show. Alijaj, who was barred from the industry by FINRA in October 2014, denied several of the allegations in statements in his BrokerCheck file. It is unclear if Alijaj is currently employed.
In one case that was settled for nearly $1.7 million in 2012, Alijaj said he "denies all allegations and findings by the panel," adding that he was not required to participate in the award.
Alijaj did not return several calls made to a phone number listed for an address in Middletown, N.J. A man at the address denied knowing Alijaj, yet went on to denounce FINRA.
Most of the disputes against Alijaj are still pending.
TIME TO PAY UP
Existing settlements and arbitration awards regarding Alijaj have totaled $4 million, but at least $1 million in awards have not yet been paid, say lawyers representing clients who filed complaints against him in two different cases. It's unclear whether Aliajaj has made an attempt to pay the remaining damages he owes.
According to FINRA rules, he has 30 days to pay upon receipt of an arbitration award decision. Firms also are required to certify in writing that they have complied with awards against them or their employees. When an award is not paid, clients retain the option to recoup the damages in civil court, according to Tom Lewis, an attorney not associated with the cases against Alijaj.
"If he was a resident of New York, you can go to a New York City court and … convert the award into a judgment," Lewis says. "Now it becomes an instrument that you can levy on bank accounts, personal property, because it's a court-backed award."
Soreide, the attorney representing the two clients from the most recent arbitration decision against Alijaj, says they will attempt to seek recourse in civil court.
'A GREAT SALESMAN'
Jonathan Kurta of Fitapelli Kurta in New York -- an attorney representing another former Alijaj client, Jerry Camilli, in a separate case -- says Alijaj has not yet paid $1.1 million in damages and attorney fees awarded to the former client. As in the Legend case, Alijaj did not appear during hearings, nor did he have a lawyer represent him, according to arbitration records.
Kurta and his client are in the midst of seeking recourse through the court system.
"I think the thing with this broker is the type of clients he attracted. He attracted people with money to invest and they invested a lot of money with him. I think he's a great salesman and he took advantage of these people," Kurta says. "If you look at his BrokerCheck file, there are no small complaints. These are large complaints."
A 2009 client complaint alleging unsuitable recommendations, churning and breach of fiduciary duties was settled for $1.6 million, according to Alijaj's BrokerCheck file. The alleged misconduct occurred during 2008 and 2009. The records show that he was ordered to pay $500,000 in the settlement, and that the client had sought damages of about $2.9 million.
At the time Alijaj was employed at Point Capital -- which was later acquired by Tampa, Fla.-based broker-dealer JHS Capital Advisors -- and subsequently by John Thomas Financial, which closed in 2013 after its founder was sued by the SEC for deceiving investors. JHS did not return calls or emails seeking comment.
In a statement in his BrokerCheck file, Alijaj denied those allegations.
"The questioned activity was consistent with client's specified investment objectives and financial capabilities. Based on the expense and uncertainty associated with potentially four weeks of hearing dates, I opted to resolve this matter by settlement with no admission of liability."
For the remaining client complaints involving Alijaj, which have yet to be settled or resolved in arbitration, clients are seeking more than $8 million in alleged damages.
--With additional reporting by Suleman Din.