JOSHUA DAVID NICHOLAS Barred by FINRA

On January 24, 2022, the Financial Industry Regulatory Authority (FINRA) barred JOSHUA DAVID NICHOLAS (Josh Nicholas CRD#: 6529944).  Nicholas resigned from Merrill Lynch of Stuart, Florida, over allegations of forging documents and misappropriating funds, according to a recent article in Financial Advisor IQ.
Without admitting or denying FINRA’s findings, JOSHUA DAVID NICHOLAS consented to the sanction and to the entry of findings that he allegedly converted client funds. FINRA’s findings alleged that Nicholas engaged in futures contracts through an outside business activity (OBA). Two of Nicholas’s OBA clients lost more than $1 million as a result of his futures trading.
According to FINRA, in an effort to recoup some of their losses, JOSHUA DAVID NICHOLAS convinced the clients to invest $300,000 in a promissory note with his OBA so that entity could invest the additional funds in securities on their behalf. Allegedly, Nicholas transferred $280,000 from his company’s bank account to his personal bank account and spent approximately $58,000 of these funds on personal expenses.
FINRA’s findings also alleged that JOSHUA DAVID NICHOLAS provided the clients with a fictitious brokerage statement containing misrepresentations. After executing the promissory note, Nicholas’ clients repeatedly asked him to provide a copy of the company’s account statement to show them whether and how the proceeds of the note had been invested.  Nicholas then prepared and emailed a copy of a brokerage statement allegedly showing that his company had opened a brokerage account at a FINRA member firm, and that the account owned a number of securities to secure the note.
According to FINRA, the brokerage statement stated, among other items, that the account was in the name of Nicholas’ company, that the account held shares of certain equity securities, and that the account had earned approximately $72,000 in dividend income that month. FINRA alleges that JOSHUA DAVID NICHOLAS had fabricated the document. Allegedly, neither Nicholas’s company nor he had an account at the firm, and neither his company nor he owned any assets taken care of at the firm. The claims in the fabricated statement were therefore allegedly false.
FINRA’s findings also included that JOSHUA DAVID NICHOLAS engaged in an undisclosed business activity. Nicholas failed to provide written notice to his member firm that he was engaged in an OBA involving the corporate entity he formed and through which he traded futures contracts. Nicholas did not receive approval from the firm to engage in his OBA. Allegedly, Nicholas falsely attested in a firm annual compliance certification that he did not engage in any OBAs.
FINRA found that Nicholas engaged in an undisclosed private securities transaction. The promissory note that Nicholas solicited his OBA clients to invest $300,000 in was a security and Nicholas participated in this private securities transaction away from the firm. Nicholas failed to either provide prior written notice to the firm or receive prior written permission from the firm prior to engaging in the transaction.
According to FINRA’s BrokerCheck, JOSHUA DAVID NICHOLAS, had been in the securities industry less than one year. He had been registered with two firms. Nicholas has 5 disclosures on his FINRA CRD report. Three are “Regulatory,” one is an “Employment Separation after Allegations,” from Merrill Lynch, Pierce, Fenner & Smith Inc., dated July 29, 2020, following the allegations of, “Conduct involving forgery of a client document.” Nicholas voluntarily resigned from Merrill Lynch. There is also a settled “Customer Dispute” dated August 10, 2020, alleging, “The Trustees allege unsuitable investment recommendations, selling away and omission of material facts in February 2020.” The settlement amount was $275,000.00.
If you’ve experienced losses due to the actions or recommendations of the broker formerly with Merrill Lynch of Stuart, Florida, JOSHUA DAVID NICHOLAS, contact the Florida-based Soreide Law Group and speak to an experienced securities lawyer at no cost regarding the possible recovery of your investment losses due through a FINRA arbitration at:  888-760-6552.
Soreide Law Group works on a contingency fee basis and represents our clients nationwide before FINRA.