FINRA Broker Disciplinary Action Report: March 2019
Each month, the agency that regulates the financial industry, FINRA (Financial Industry Regulatory Authority), produces a detailed report that runs down all disciplinary actions recently taken against brokerage firms and brokers. We strongly encourage any investor who suspects their broker and/or broker-dealer of having lost them money on dubious terms to at least skim this report to see if you recognize any names, schemes, products, or securities.
For our part, we like to pick out some of the highlights from each report. Specifically, we’re looking for schemes or abuses that might be more far-reaching than the individual cases brought through the FINRA arbitration process.
Brokers & Brokerages Barred, Suspended, and/or Fined by FINRA
Hennion & Walsh, Inc. (CRD #25766, Parsippany, New Jersey)
Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that its brokers recommended early exchanges of proprietary Unit Investment Trusts (UITs) in the same series (a series-to-series switch) in customer accounts that had substantially similar investment objectives and portfolios. The findings stated that the firm’s registered representatives did not reasonably assess whether the alleged benefits to the customers from the switches outweighed the additional sales charges the customers would incur by making the switch and therefore they did not have a reasonable basis to recommend these series-to-series switches to their customers. As result, customers incurred unnecessary sales charges of $305,438.83.
Stewart Clinton Malloy (CRD #1029931, The Villages, Florida)
Malloy was barred from association with any FINRA member in all capacities. The sanction was based on findings that Malloy failed to appear and provide FINRA with requested onthe-record testimony in connection with an investigation into his potential unsuitable and unauthorized trades in customer accounts. The findings stated that the matter arose from an amendment to a Form U5 filed by Malloy’s member firm that reported allegations that he had made unsuitable recommendations in the accounts of customers who alleged they lost $1 million as a result of his misconduct
Jay R. Weiser (CRD #1511042, Mendota, Illinois)
Without admitting or denying the findings, Weiser consented to the sanction and to the entry of findings that he failed to cooperate with FINRA’s requests for documents and for on-the-record testimony related to an investigation into his conduct regarding the sale of promissory notes and interests in a company to determine whether he engaged in unapproved private securities transactions.
Matthew Philip Amos (CRD #1177946, York Haven, Pennsylvania)
Without admitting or denying the findings, Amos consented to the sanction and to the entry of findings that he failed to provide documents and information requested by FINRA in connection with an ongoing investigation into allegations set forth on his Form U5, namely, that he submitted a false document with a forged signature in connection with a variable annuity transaction request for his personal account.
Gary Lyle Pevey (CRD #2129469, Sacramento, California)
Without admitting or denying the findings, Pevey consented to the sanctions and to the entry of findings that he engaged in private securities transactions without providing notice to, or obtaining approval from, his member firm. The findings stated that Pevey solicited investors to purchase promissory notes relating to a purported real-estate investment fund. Pevey sold approximately $1.11 million in the fund’s promissory notes to investors, some of whom were his firm’s customers, and received $40,027 in commissions in connection with these transactions.
For the full FINRA Disciplinary Report, please click here.