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Gopi Krishna Vungarala – Decatur, Texas

Vungarala appealed an Office of Hearing Officers (OHO) decision to the National Adjudicatory Council (NAC). Vungarala was barred from association with any FINRA member in all capacities and ordered to pay $9,682,629, plus prejudgment interest, in disgorgement of commissions received. The sanctions were based on findings that Vungarala willfully violated Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder, and FINRA Rules 2020 and 2010 by making materially false and misleading statements to conceal his commissions on investments made by a Native American tribe he was employed by to manage its investment portfolio. The findings stated that Vungarala persuaded the tribe to invest in REITs and business development companies through a broker-dealer firm where he told the tribe he “parked” his registration. As a result, he received over $9 million in commissions. Through false and misleading statements, Vungarala led the tribe to believe that he did not receive commissions on its transactions and that he had no conflict of interest. The findings also stated that Vungarala willfully misled the tribe regarding its eligibility for volume discounts by failing to disclose to it that it was eligible to receive more than $3.3 million in volume discounts. Vungarala personally benefited because the discounts would have reduced his commissions. The sanctions are not in effect, pending review. (FINRA Case #2014042291901)

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