Broker accused of lying to tribal client about $190M in investments

Gopi Vungarala worked for the Saginaw Chippewa Tribe of Michigan as an investment manager. Screenshot from LinkedIn

The Financial Industry Regulatory Authority has filed a complaint against a broker who is accused of misleading a tribal client about more than $190 million in investments.

According to the complaint, Gopi Vungarala failed to disclose his involvement in the investments. His firm, Purshe Kaplan Sterling, made $11.4 million in commissions off the tribe, and he pocketed $9.6 million of that amount, the agency's department of enforcement said.

The client is only identified as "ST" in the February 4 filing. But it appears to be the Saginaw Chippewa Tribe of Michigan, where Vungarala served as an investment manager between November 2008 and January 2015, a timeline that corresponds with the allegations against him.

"Responsible for the development of investment strategy and management of Multi-Billion dollar endowment funds," Vungarala's LinkedIn profile reads of his employment with the tribe. "Also responsible for daily investment activities."

As part of the fraud, FINRA said Vungarala failed to inform the tribe that it was entitled to volume discounts on its investments. Instead, he took the $3.3 million that should have gone back to the tribe, the complaint stated.

The complaint was submitted to FINRA's Office of Hearing Officers for potential action against Vungarala.

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FINRA: Broker Lied to Native American Tribe About Nontraded REIT Commissions (ThinkAdvisor 2/8)

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