(CRD #4648278, San Juan, Puerto Rico)

April 15, 2025 – An AWC was issued in which Melendez was barred from association with any FINRA member in all capacities. Without admitting or denying the findings, Melendez consented to the sanction and to the entry of findings that he borrowed $738,000 from two customers of his member firm through four separate loans without providing prior written notice to or obtaining written approval from the firm. The findings stated that Melendez initially borrowed $300,000 from the first customer, a senior, by executing a written loan agreement that stated that the loan was for capital to invest in a billboard advertising business. The loan agreement required Melendez to repay the principal plus $130,000 in interest within five years. To date, Melendez has not paid the senior customer any interest or principal. In addition, Melendez borrowed $438,000 from the second customer through three separate loans. Melendez and the second customer executed a written loan agreement for the first loan only. That agreement stated that the loan was for capital to complete the acquisition of an ice cream business and required Melendez to repay the loan within five years. Melendez and the second customer orally agreed that the other two loans, along with the unused funds from the first loan, would be used to purchase a sign business. To date, Melendez has not repaid any of the loans from second customer. Furthermore, Melendez falsely attested on compliance questionnaires that he had not received a loan from any firm client. Melendez’ firm settled claims by the customers arising from the conduct described in this AWC. The findings also stated that Melendez improperly used customer funds. Melendez used thousands of dollars from the senior customer’s loan to pay personal expenses, such as cruises, airline tickets, and retail purchases. The senior customer had not authorized Melendez to use her money for any purpose other than investing in a billboard advertising business. In addition, the second customer did not authorize Melendez to use her money for any purpose other than to purchase an ice cream business and sign business. Nonetheless, Melendez used thousands of dollars from the second customer’s loans to pay expenses related to his separate billboard advertising business. The findings also included that Melendez failed to timely disclose OBAs. Melendez took steps to purchase an ice cream business, from which he had a reasonable expectation of earning compensation. ubsequently, Melendez became an officer of a newly formed holding company, which he intended to use as a vehicle to purchase the ice cream business. Melendez never disclosed to the firm that he was an officer of this holding company, and he did not notify or seek approval from it before engaging in OBAs related to the ice cream business. Eventually, Melendez disclosed the ice cream business to the firm, but his disclosure falsely stated that no firm customer was involved in the business, despite having borrowed money from the second customer to purchase the business. In addition, Melendez took steps to purchase a sign company, from which he had a reasonable expectation of earning compensation. Melendez negotiated deal terms, submitted purchase agreements, and entered loan agreements, including with the second customer, to finance the purchase. Melendez did not notify or seek approval from the firm before engaging in OBAs related to the sign company. Eventually, Melendez disclosed the business to the firm, but his disclosure falsely stated that no firm customer was involved in the business, despite having borrowed money from the second customer to purchase the business. (FINRA Case #2023077646901) If you have suffered losses as a result of Manuel Francisco Melendez's act and/or actions, we would like to hear from you. We are currently investigating claims on behalf of clients who have suffered significant losses in their portfolios that are managed by Manuel Francisco Melendez. The Schwartz Law Firm represents investors in claims against financial advisors and their firms. If you have questions about your potential claim or need assistance from an investment fraud lawyer, please contact us at 866-618-0545 or email Matthew Schwartz directly at mschwartz@tslfirm.com.