Donald Kay Gross II of Parsippany New Jersey is a stockbroker formerly registered with Summit Equities Inc. who is the subject of an Order of Summary Suspension issued by California Department of Insurance wherein Gross was suspended for three months from engaging in insurance business in California supported by allegations against Gross of selling away from his firm. PLBS11766-A (Dec. 1 2017).
FINRA Public Disclosure confirms that Gross has also been subject of a Stipulation and Consent Order issued by Florida Department of Financial Services which suspended his insurance registration for three months based upon findings that Gross engaged in private securities transactions and falsified annual compliance attestations issued by his firm. MC-2376135 / CA-4553 (Mar. 1, 2017).
California Department of Insurance and Florida Department of Financial Services took action against Gross based upon him having been fined $10,000.00 and suspended for two years from associating with any FINRA member in any capacity based upon Gross’ consent to FINRA’s findings that he sold away from his firm, failed to make required regulatory disclosures, and furnished a compliance certification to his firm containing false statements regarding his business activities. Letter of Acceptance, Waiver and Consent, No. 2013039548401 (Oct. 27, 2016).
According to the AWC, Gross sold eleven of Summit’s customers a total of $6,200,000.00 in limited partnership interests in a hedge fund, IME, so that IME could engage in options trading. Gross was reportedly compensated for his sales efforts through being paid a portion of the IME Fund advisory fee. Customers ultimately sustained ninety-five percent losses on their investments when the IME Fund failed. Gross reportedly failed to gain approval from his firm to participate in the private securities transactions, and then failed to disclose his activities involving IME Fund when prompted through the firm’s compliance questionnaire. Gross’ conduct was found by FINRA to be violative of FINRA Rules 2010 and NASD Conduct Rule 3040.
FINRA Public Disclosure reveals that Gross is the subject of a customer initiated investment related arbitration claim which settled for $2,000,000.00 in damages founded on accusations that Gross misrepresented Illume limited partnership interests and sold the investments away from his firm. FINRA Arbitration Nos. 13-03722 and 13-03396 (Apr. 2, 2015). The customer additionally alleged that Summit Equities, Inc. failed to supervise person’s activities.
Gross was fired by Summit Equities, Inc. on October 27, 2016, based upon having committed the conduct subject of FINRA’s disciplinary action.
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