On May 21, 2019, the Financial Industry Regulatory Authority (“FINRA”) Department of Enforcement brought a Complaint (Disciplinary Proceeding #: 2017054405401) against The Huntington Investment Company securities broker William Kielczewski (CRD#: 4034356, Toledo, Ohio). Notably, FINRA’s Department of Enforcement alleged Kielczewski violated FINRA Rules because he participated in private securities transactions. Supposedly, the securities broker helped execute four customers’ investments of $10,000,000 in hedge fund, Mariemont Capital Partners L.P. Here is a synopsis of the Complaint:

Kielczewski Purportedly Forms Mariemont Capital Partners For Trading Of Residential Mortgage-Backed Securities

FINRA Department of Enforcement claims that in 2014, Kielczewski formed Mariemont Capital Partners, L.P. (“the Fund”). Apparently, the Fund was designed for trading and investing in mortgage-backed securities. Following the Fund’s establishment, it issued a private offering memorandum pertaining to investor purchases of limited partnership interests in the Fund. Supposedly, this Fund was made available only for accredited investors. Apparently, Kielczewski also created Mariemont Capital LLC (“MC LLC”) to be the Fund’s investment manager. This supposedly enabled Kielczewski, who managed MC LLC, to make investment decisions for the Fund.

FINRA’s Policies Forbade William Kielczewski From Selling Mariemont Limited Partnership Interests

The Complaint alleges that the Fund became Huntington’s customer in January 2014; however, William Kielczewski did not control the Fund’s account at Huntington. Apparently, during this time, Huntington thought about making the Fund available to wealthy investors; however, it ultimately declined. Allegedly, Huntington did not allow Kielczewski or other securities brokers at Huntington to sell limited partnership interests in the Fund. In fact, Huntington’s policy made clear that Kielczewski was not allowed to participate in any private securities transaction when registered through Huntington. However, Huntington permitted securities brokers holding passive outside investments conditioned on the securities broker not performing any services for the outside investments.

FINRA claims that Kielczewski told Huntington about Mariemont Capital; however, he did not clarify which Mariemont entity he was referring to. Supposedly, Kielczewski also told Huntington that he was a passive investor that had minimal involvement with Mariemont.

Kielczewski Allegedly Violates Huntington Policy By $10M In Mariemont Investments To Four Customers

FINRA says that 41 investors bought a total of $53,400,000 in limited partnership interests between January 31, 2014 and June 15, 2017. Allegedly, from January 2014 to June 2016, William Kielczewski participated in private securities transactions with at least four Huntington customers who purchased the interests. For example, FINRA Department of Enforcement alleged that Kielczewski helped customers WI and RI buy $303,841.39 in limited partnership interests of the Fund. Supposedly, Kielczewski also helped SC make a $6,000,000 investment in the Fund. Finally, FINRA stays that Kielczewski helped customers KK and K&R buy a $4,000,000.00 stake in the Fund. Contrary to Huntington’s polices, Kielczewski engaged in the private securities transactions without giving written notice to Huntington. Because of this, the Department of Enforcement says Kielczewski violated NASD Rule 3040 in addition to FINRA Rules 3280 and 2010.

William Kielczewski Allegedly Makes False Statements In FINRA Filings About Mariemont Activities

Also, FINRA Department of Enforcement says that William Kielczewski made false statements about his Mariemont activities. Kielczewski allegedly completed a Form U4 representing himself as a “silent minority partner” in MC LLC. Not only that, but Kielczewski purportedly stated that had a passive position, and that his investment in the company was in sub-investment grade mortgage backed securities. During this time, FINRA’s Rule 1122 mandated that Kielczewski fully and accurately complete his Form U4. Because of Kielczewski allegedly falling to be truthful about his status with Mariemont, Department of Enforcement says Kielczewski violated, among other things, FINRA Rules 1122 and 2010.

Lars Soreide Highest Ethical Standard Award 2018

Lars Soreide Highest Ethical Standard Award 2018

FINRA’s Complaint is still underway. Notably, Huntington disaffiliated with Kielczewski on May 25, 2017. The firm discharged him because he allegedly misrepresented outside business activities. Huntington also alleged Kielczewski engaged in private securities transactions (also referred to as “selling away”). Have you experienced losses by investing with Huntington Investment Company securities broker William Kielczewski? If so, contact Soreide Law Group at (888) 760-6552 and speak with experienced counsel about a possible recovery of your investment losses. Soreide Law Group represents clients on a contingency fee basis and advances all costs. The firm has recovered millions of dollars for investors who have suffered losses due to misconduct of brokers and brokerage firms.