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Regulation and Compliance > State Regulation > Massachusetts

Ex-Investors Capital Broker Barred for Stealing $250K

By Melanie Waddell

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Massachusetts’ top securities regulator, William Galvin, has ordered a former Investors Capital Corp. broker and advisor rep, Nick Palky, to return more than $250,000 to a client’s account after Palky used forged checks to steal the client’s money.

Galvin’s Securities Division opened an investigation into Palky, a former Woburn resident previously known as Nikhil Palkhiwala, after receiving a complaint.

Palky was registered as a broker-dealer from 1987 to 2015, most recently with Investors Capital Corp., which was closed in 2016 after being acquired by Cetera.

“In the course of the investigation, Palky admitted to stealing nearly $250,000 from his client, over a period of several months in 2016,” according to a statement from Galvin’s office.

After misappropriating his client’s funds, Palky moved from Massachusetts to California, where Galvin’s office alleges “he has lived off the stolen money.”

In 2018, Palky moved to Simi Valley, California, “where he purchased a home in cash,” the consent order states. “Palky has had no sources of income. Instead, Palky uses the client’s funds and any associated investment gains from these funds to pay for all his basic living expenses.”

Palky agreed to return all of the stolen funds, with interest, to the victim’s accounts.

Galvin has also ordered Palky to pay a $100,000 administrative fine to the commonwealth and has banned him from future registration in the securities industry in Massachusetts.

Palky was able to misappropriate his client’s investments through forgery, after he recommended to the client that she liquidate her money market funds, according to the consent order.

“Palky then made regular withdrawals from the woman’s account, without her knowledge or authorization, using a checkbook he had obtained by forging the client’s signature,” the order states. “By repeatedly forging checks under his customer’s name, Palky was able to transfer the customer’s money to his own personal account.”

The consent order further states that Palky “attempted to mislead the client about the status of her accounts when she asked to have the funds transferred to separately managed accounts. Instead, Palky refused to do so, and pressured the client to allow him to retain management of her funds” despite no longer being registered in the securities industry.

(Image: Adobe Stock)

Melanie Waddell

@Think_MelanieW

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