The Investor’s Watchdog

The Investor's Watchdog

Founders of California-Based Investment Advisory Firm, VII Peaks Capital Named Respondent in FINRA Complaint concerning $9.9 Million in Undisclosed Private Securities Transactions

Monday, August 26, 2019

The Financial Industry Regulatory Authority (FINRA) Department of Enforcement recently filed a complaint against registered representatives Gurpreet Chandhoke and Stephen Shea for failing to disclose private securities transactions (PSTs) and other outside business activities to the member firms between April 2014 and October 2016. During this time, Chandhoke and Shea were associated with member firms Gordian Investments, LLC, Penserra Securities, LLC and Arete Wealth Management, LLC in Orinda, California. Chandhoke and Shea also co-founded VII Peaks Capital LLC, an investment advisory company that is registered with the Securities and Exchange Commission, in 2009.

In April 2014, while working for Gordian Investments, Chandhoke and Shea created AlesiaTech, a technology company meant to develop and provide software for data analytics. Chandhoke served as the Chief Executive Officer and Shea as the President, each participated in business activities including creating and distributing offering materials and soliciting investors. They allegedly participated in several PSTs while associated with Gordian and Arete totaling over $9.9 million.

Then, in October 2014, Shea and Chandhoke created PFU, LLC as a holding company through which, according to the FINRA Complaint, they intended to make real estate investments and lease property. FINRA alleges that they opened and maintained four separate bank accounts, making 37 cash deposits totaling $72,950. Each deposit was made at ATMs around the San Francisco Bay area and Los Angeles and did not exceed $10,000; an attempt, FINRA alleges, to evade federal reporting requirements that would have cause financial institution to file Currency Transaction Reports.

In November 2014, when Chandhoke was not associated with a FINRA member firm, he opened a line of credit under the name Chandhoke Holdings, LLC. In May 2016, he secured a $250,000 loan for Chandhoke Holdings and used this line of credit, without acknowledging that the line of credit would be used to purchase, carry or trade in securities, upon joining Arete Wealth Management.

Finally, Chandhoke held a position as “board manager” at Relativity Media, LLC, the operating company of Relativity Holdings LLC, a “privately-held Hollywood studio with a revolutionary, full-integrated and diversified global media platform.” Between May and October 2015, while associated with Penserra Securities, LLC, Chandhoke failed to notify this outside business activity.

This alleged activity is in violation of NASD Rules 3040 and 3050(c) and FINRA Rules 3270, 3280 and 2010. FINRA Department of Enforcement is requesting relief to make findings of fact and conclusions of law that Gurpeet Chandhoke and Stephen Shea committed the violations alleged in the complaint and order that sanctions and fines be imposed under FINRA Rule 8310(a) and 8330.

If a broker was not properly supervised while registered at a brokerage firm, the firm can be held liable for the broker’s misconduct. Did you invest in VII Peaks under the advice of Gurpeet Chandhoke, Stephen Shea, or another broker or advisor. If so, you may be able to recover from them or their brokerage firms. Since 1998, the attorneys at ChapmanAlbin have been representing victims of investment fraud and broker misconduct. Call us at 1-877-410-8172 today for a free, no obligation consultation.

Author: Jason T. Albin

Jason Albin is an Attorney and Partner at ChapmanAlbin, the investor rights law firm. He has represented hundreds of investors who have lost money due to broker misconduct, unsuitable investment advice and fraud.​ Jason also represents individuals in “whistleblower” suits filed against unscrupulous companies that try to defraud the US federal and state governments.

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