FINRA Panel Awards Ex-Kingswood Adviser $11.3M, Rejects $6.4M Counterclaim
A FINRA arbitration panel has ordered Kingswood Capital Partners LLC, its chief executive, and its chief compliance officer to pay former adviser Rikin Patel $11,341,369.25 and denied the firm’s $6.4 million counterclaim against him.
The Sept. 25 award holds the San Diego-based broker-dealer, chief executive officer Michael Nessim, and chief compliance officer Mohamed Alsoraimi jointly and severally liable, meaning Patel can collect the full amount from the firm or from either executive individually. The panel also ordered per diem interest of $2,465.75 from Aug. 26, the final hearing date, until the award is paid. That interest totaled $115,890.25 as of Oct. 12.
The award follows a dispute AltsWire reported last fall, when Texas-based Solidaris Capital LLC sued Kingswood in federal court, alleging the firm induced a $10 million payment meant for Patel and then refused to pass it on. Solidaris alleged it had agreed to compensate Patel approximately $16.4 million for capital he raised for its offerings through Kingswood, with the money routed through the firm, and that it wired the first $10 million installment to Kingswood in January 2025. Patel resigned from Kingswood in March 2025, according to that suit.
Patel filed his FINRA claim on April 28, 2025, alleging breach of contract, conversion, and civil theft. He sought at least $10 million in compensatory damages plus 9% annual interest, treble damages, and expungement of the termination disclosure Kingswood filed about him.
Kingswood counterclaimed in June 2025 for $6,427,000, plus punitive damages, alleging breach of contract, breach of the implied covenant of good faith and fair dealing, conversion, common-law fraud, violation of New York’s consumer protection statute, and intentional interference with contractual relations.
After 18 hearing sessions held between April and August, the two-member panel awarded Patel compensatory damages and denied the counterclaim. It denied his requests for treble damages, punitive damages, and attorneys’ fees, as well as his expungement request. A third arbitrator was unable to attend the hearing, and the parties agreed on the record to proceed with two. The award does not explain the panel’s reasoning.
The hearing session fees of $47,400 were split evenly between Patel and the respondents.
Kingswood declined to comment, citing the ongoing legal proceedings. At the time of publication, Patel had not responded to AltsWire’s request for additional information.
Audit Disclosures
Kingswood’s audited financial statements for 2025, with an auditor’s report dated March 23, 2026, describe a lawsuit the firm filed in June 2025 in the U.S. District Court for the Southern District of New York against a client that it said failed to pay the full fee owed under a written agreement. According to the notes, the client acknowledged a total fee of $16,427,000 was earned, paid $10 million, and left a balance of $6,427,000 outstanding. The firm recorded a $2 million accrual for estimated legal fees in that matter.
The notes do not name the client. Court records show Kingswood sued Solidaris in that court on June 27, 2025. The $6,427,000 balance is the same amount Kingswood sought from Patel in its FINRA counterclaim.
The notes also describe seven customer arbitrations involving suitability claims: six pending against the firm, seeking between approximately $125,000 and $350,000 each, and one filed against an affiliate that was settled for $172,500, which Kingswood reimbursed.
The notes do not mention Patel’s arbitration, which by the date of the auditor’s report had been pending for nearly 11 months, or Solidaris’ suit against Kingswood in the U.S. District Court for the Northern District of Texas, filed in September 2025 and seeking return of the $10 million. The firm said it evaluated subsequent events through March 23, 2026, “noting no matters requiring disclosure in the financial statements.”
As of Dec. 31, 2025, Kingswood reported member’s equity of $5.1 million and net capital of $2.1 million, $1.9 million more than its $250,000 regulatory minimum. The firm reported 2025 revenue of $77.3 million and net income of $3.2 million, and distributed $3.5 million to its parent during the year.
Payment Deadline
Under FINRA rules, monetary awards must be paid within 30 days of receipt unless a party has filed a motion to vacate in court. If Kingswood received the award on the Sept. 25 service date, the deadline falls on Oct. 25. FINRA can suspend or cancel the registration of a member firm or associated person that fails to pay an arbitration award.
Kingswood Capital Partners is owned through Kingswood US LLC by Kingswood Holdings Ltd., a former AIM-listed wealth manager taken private in 2025 by HSQ Investment Ltd., an entity tied to funds managed by Pollen Street Capital Ltd. London-listed Pollen Street Group said Sept. 23 that it was in preliminary discussions with a limited number of third parties about a possible offer for the company, describing the talks as at “a very early stage.” No Pollen Street entity is a party to the arbitration.
Kingswood Capital Partners is unrelated to Los Angeles-based private equity firm Kingswood Capital Management.
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