The Financial Industry Regulatory Authority has fined Rudy Mejia Jr., chief executive officer and founder of Austin-based Nickel Hayden Advisors $10,000 for involving himself in the sale of $738,000 in limited partnership interests of a pooled investment fund he co-founded and co-managed.
In addition to the sale to seven different investors, Mejia purchased $100,000 worth of the limited partnership interests himself and did not disclose the sale to Estrada Hinojosa & Company, his former employer. Mejia also executed 304 transactions on behalf of the investment fund and did not inform his former employer or seek permission.
Mejia is a West Point graduate and former U.S. Army captain and was a Bond Buyer Rising Star in 2019 as a young public finance banker. After breaking with Estrada Hinojosa, he formed his own firm, Nickel Hayden Advisors.
On top of the fine, Mejia was suspended from associating with any FINRA member firm in all capacities for eight months.
"In September 2022, Mejia and a friend co-founded a pooled investment fund with an options trading strategy as well as management company to serve as the fund's general partner," FINRA said, noting that Mejia purchased $100,000 and seven other investors purchased a total of $738,000 of the fund's limited partnership interests between November 2022 and July 9, 2023.
"The investors were friends or family of Mejia or of the fund's other co-founder," FINRA said. "None of the investors were customers of Estrada Hinojosa. With respect to three of the investors, Mejia participated in the sale of the fund's limited partnership interests by introducing the investment opportunity to the investors, providing them with information on the fund, directing the fund's legal counsel to send the offering documents to the investors, and, in two instances, countersigning the subscription agreement on behalf of the fund to accept the investment."
Mejia was paid in the form of quarterly performance fees paid by the fund to the management company he co-founded to serve as the fund's general partner.
He executed another 304 transactions in the accounts while still registered with Estrada Hinojosa in September 2022. On July 9, 2023, the firm filed a Form U5 or a Uniform Termination Notice for Securities Industry Registration and was under internal review for a month before that.
Mejia did not respond to requests for comment.
