Gary Arthur Forrest of Flint Michigan a stockbroker formerly employed by American Portfolio Financial Services has been fined $5,000.00 and suspended for ten months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that Forrest engaged in unapproved private securities transactions. Letter of Acceptance Waiver and Consent No. 2018059400801 (Apr. 11, 2019).
According to the AWC, from September of 2016 to November of 2016, Forrest advised thirteen customers of American Portfolio Financial Services and two additional investors to buy promissory notes in Woodbridge Group of Companies LLC. Evidently, those promissory notes were not offered by American Portfolio Financial Services. Apparently, a total of $826,986 had been used by the fifteen investors to purchase the promissory note investments, which enabled Forrest to accumulate commissions of $25,905.00.
During the time that Forrest executed these transactions, supervisory procedures implemented by American Portfolio Financial Services required stockbrokers to ask for the firm’s permission before getting involved in the securities transactions outside the firm’s auspices. Furthermore, American Portfolio Financial Services restricted stockbrokers from selling away unless it was authorized by the firm. Those restrictions on the private securities transactions also included any offers stockbrokers made regarding promissory notes. The AWC revealed that the firm’s permission had been requested by Forrest; however, it was denied. Nonetheless, the $826,986 in promissory notes had been sold by Forrest. As a result, FINRA found Forrest’s conduct violative of FINRA Rules 2010 and 3280.
Evidently, following the sales of promissory notes to the fifteen investors, a bankruptcy petition had been filed by Woodbridge. Later, Woodbridge and the company’s owner Robert H. Shapiro, were subject of final judgments which mandated the disgorgement of Woodbridge and Shapiro’s gains from the securities transactions.
FINRA Public Disclosure additionally confirms that a customer filed an investment related arbitration claim concerning Forrest’s activities where the customer sought $100,001.00 in damages founded on accusations that recommendations were made to the customer by Forrest concerning fraudulent real estate security and promissory notes, and misrepresentations had been made to the customer concerning those investments. FINRA Arbitration No. 18-02406 (June 28, 2018).
