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Renegades CEO fined for soliciting investments in organisation


The Financial Industry Regulatory Authority (FINRA) has dealt Renegades CEO Chris Roumayeh a 21-month ban from the brokerage industry for soliciting investments without disclosing his position within the organisation.

The suspension, also imposing a $15,000 (£12,309) fine on Roumayeh, was delivered on Wednesday for both soliciting and managing investments in the Detroit-based organisation.

Photo credit: Riot Games

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The period of infringement is said to have taken place between June 2014 and June 2019 when Roumayeh operated as a general securities representative at American investing and wealth management company Merrill Lynch.

Although the disciplinary report does not explicitly name Renegades, it states Roumayeh was involved in the purchase of a “franchise involved in the professional video gaming industry” where he “managed the franchise’s day-to-day operations” as an owner.

Per FINRA’s findings, Roumayeh and an unidentified Merrill Lynch customer purchased Renegades in September 2016 without notifying the brokerage firm. Five corporate entities tied to Renegade’s operations were also formed, appointing Roumayeh as an officer and director for them while soliciting prospective investors in the organisation. In March 2019, Roumayeh reportedly courted a $5.5 million (£4.5 million) investment in Renegades from an unnamed publicly-traded company in exchange for shares in the organisation.

Furthermore, the brokerage regulator found Roumayeh formed two real estate limited liability companies in June 2014 and January 2015, respectively. The LLCs, Real Estate LLC and Roumayeh LLC, were registered in Michigan and appointed him as the CEO of each entity.

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By participating in these private security transactions and outside business activities without notifying, and receiving prior written approval from Merrill Lynch, Roumayeh was found in violation of FINRA Rules 3270, 3280, and 2010.

The FINRA report states: “Roumayeh did not disclose his outside activities, including the purchase and operation of the Franchise, and formation of its related corporate entities and Real Estate LLC, to Merrill Lynch. Roumayeh also concealed his relationship with the corporate entities by forming them in his wife’s name and naming her as the sole authorized representative on Roumayeh LLC’s bank account. Roumayeh also made false statements to the Firm on four annual compliance questionnaires concerning his outside business activities.”

Merrill Lynch reported Roumayeh resigned from the wirehouse in July 2019 while under internal review for his undisclosed business interest. Despite no longer being affiliated with a FINRA-regulated dealer, he remains subject to the regulatory authority’s jurisdiction. Roumayeh accepted the sanctions without admitting or denying the findings, according to the disciplinary letter.

Esports Insider says:  It’s impossible to say what Roumayeh’s actual intentions were when forming these holding companies and soliciting investments in them, but when there’s smoke, there’s most certainly fire.

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