CFP Board Imposes Interim Suspension On Ash Narayan
Certified Financial Planner Board of Standards, Inc. (CFP Board) announced that it has imposed an interim suspension against Ash Narayan, of Irvine, California, effective October 25, 2016. The interim suspension of Mr. Narayan’s right to use the CFP® certification marks was issued by the Disciplinary and Ethics Commission (Commission) at its October 2016 meeting.
After discovering that Mr. Narayan was named as the primary defendant in a Securities and Exchange Commission (SEC) Complaint alleging that he defrauded investors, misappropriated client funds, misrepresented his professional qualifications, failed to meet his fiduciary obligations and violated his company’s Code of Ethics, CFP Board issued an Order to Show Cause to Mr. Narayan pursuant to Article 5.1 of the Disciplinary Rules and Procedures.
The Order to Show Cause stated Mr. Narayan directed the investment of approximately $33 million by at least 77 clients to a company selling sports tickets to events before the teams participating in the events were finalized. These investments were unsuitable, contrary to the clients’ stated and agreed objectives and sometimes without the clients’ knowledge and consent. Mr. Narayan failed to disclose his role as a member of the board of directors of the company, his stock ownership in the company and the fact he received $2 million in finder’s fees due to the investments made by clients in the company. Mr. Narayan concealed this and other illegal activity by creating fraudulent documents. Mr. Narayan also misrepresented to clients that he was a Certified Public Accountant, when he was not.
Mr. Narayan appeared before the Commission, where he had the burden to prove, by a preponderance of the evidence, that the aforementioned conduct did not pose an immediate threat to the public and the gravity of his conduct did not significantly impinge upon the stature and reputation of the CFP® marks. Mr. Narayan did not offer any evidence by which the Commission could determine he met his burden of proof other than his general denial of the allegations against him.
After considering the evidence and testimony presented, the Commission determined that Mr. Narayan failed to prove that he did not pose an immediate threat to the public and that the gravity of his conduct did not significantly impinge upon the statute and reputation of the CFP® marks. Therefore, the Commission issued an interim suspension to Mr. Narayan. Under the interim suspension order, Mr. Narayan’s right to use the CFP® marks is suspended pending CFP Board’s completed investigation and possible further disciplinary proceedings. The interim suspension order became effective on October 25, 2016.
An interim suspension is the temporary suspension by the Commission of a CFP® professional’s right to use the marks for a definite or indefinite period of time, while proceedings conducted pursuant to these Disciplinary Rules are pending against the CFP® professional.
CFP Board’s enforcement process is a critical consumer protection. CFP® professionals agree to abide by CFP Board’s Standards of Professional Conduct (Standards), which includes the Code of Ethics and Professional Responsibility, Rules of Conduct and Financial Planning Practice Standards. The Standards set forth the ethical standards for financial planners who hold the CFP® certification, who agree to act fairly and diligently when providing clients with financial planning advice and services, putting the clients’ interests first.
CFP Board enforces its ethical standards by investigating incidents of alleged unethical behavior and following the procedures established in CFP Board’s Disciplinary Rules and Procedures (Disciplinary Rules). In cases where violations are found, CFP Board may impose discipline ranging from a private censure or public letter of admonition to the suspension or revocation of the right to use the CFP® marks. The Disciplinary Rules set forth a fair process for investigating matters and imposing discipline where violations have been found.