Gary Arthur Forrest of Swartz Creek, Michigan submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) in which he has been fined and suspended for allegedly engaging in unapproved private transactions in violation of FINRA Rules 3280 and 2010.
In February 2007, Gary Arthur Forrest joined American Portfolio as a General Securities Representative where he remained until his termination on November 16, 2016. According to the FINRA findings, Forrest engaged in private securities transactions involving the sale of Woodbridge promissory notes totaling $826,986 to 15 investors, 13 of whom were his firm’s customers. The findings stated that Forrest sold the promissory notes, despite being denied approval from his firm upon request. In addition, Woodbridge later filed a voluntary Chapter 11 bankruptcy petition and subsequent judgment required Woodbridge and it former owner to disgorge their ill-gotten gains.
FINRA Rule 3280(b) states that prior to participating in any private securities transaction, an associated person shall provide written notice to the member with which he is associated describing in detail the proposed transaction and the person’s proposed role therein and stating whether he has received or may receive selling compensation in connection with the transaction.” FINRA Rule 3280(e) defines generally a private securities transaction as any securities transaction outside the regular course or scope of an associated person’s employment with a member. FINRA Rule 2010 requires associated persons, in the conduct of their business, to observe high standards of commercial honor and just and equitable principles of trade.
Without admitting or denying FINRA’s findings, Gary Arthur Forrest was assessed a deferred fine of $5,000, ordered to pay a disgorgement of commissions received in the amount of $25,905 and suspended from association with any FINRA member in all capacities for 10 months. The suspension was in effect from April 15, 2019, through February 14, 2020.
Stockbrokers have been known to engage in many practices that may violate industry and firm rules, practices, and procedures. In order to protect investors from stockbroker misconduct, FINRA rules require brokerage firms to establish and implement a supervisory system. The implementation of these industry rules requires supervisors to monitor their employees to ensure compliance with federal and state securities laws, securities industry rules and regulations, and the brokerage firm’s own policies and procedures. If broker-dealers and/or their supervisors fail to establish and implement these protective measures, they may be liable to investors for damages which flow from the broker’s misconduct. Therefore, investors who have suffered losses stemming from private transactions, and/or other misconduct by their broker can file claims to recover damages against broker-dealers, like American Portfolio, which should consistently oversee its brokers’ activities in order to prevent the above-described misconduct.
Have you suffered losses in your American Portfolio account due to unapproved private transactions by your broker? Was Gary Arthur Forrest your stockbroker? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against American Portfolio stockbrokers who may have engaged in broker misconduct and caused investors’ losses.
The most important of investors’ rights is the right to be informed! This Investors’ Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 40 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors’ rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at email@example.com for answers to any of your questions about this blog post and/or any related matter.