Gerald Allan Eaton of Acton Massachusetts a stockbroker formerly registered with Commonwealth Financial Network has been barred in various capacities including stockbroker and investment adviser representative according to a Securities and Exchange Commission (SEC) Order based on findings of Eaton defrauding investors and stealing $3,700,000.00 from them. In the Matter of Gerald Allan Eaton Administrative Proceeding No. 3-20110 (Sept. 30, 2020).
According to the Order, from August of 1999 to October of 2019, Eaton took part in a scheme to defraud customers by obtaining money from their insurance and investment accounts that were held under his control and management. SEC indicated that the stockbroker converted $3,700,000.00 from at least fifteen customers. Those funds were used by Eaton for his own personal benefit as he paid down his home equity line of credit and his credit card bills.
SEC also revealed that customers’ signatures had been forged on documents and checks. This caused the stockbroker to misappropriate funds from those customers. To conceal the scheme, funds had been taken from vulnerable investors including those with mental or physical problems or those who were elderly.
The Order noted that on September 30, 2020, Eaton pleaded guilty to mail fraud in violation of 18 USC Section 1341, and wire fraud in violation of 18 USC Section 1343. United States v. Eaton Criminal Action No. 1:20-cr-10173-DPW (D. Mass).
Eaton has been barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity founded on findings that he failed to cooperate with the regulator’s investigation into allegations of his forgery and wrongful taking of property. Letter of Acceptance Waiver and Consent No. 2019064468601 (Nov. 20, 2019).
According to the AWC, Eaton was under FINRA’s investigation when it received notification from Commonwealth Financial Network that he was discharged based upon accusations of forgery and wrongful taking of property. The securities broker dealer indicated that fraudulent distributions from customers’ accounts had been made by Eaton and that transactions were executed without their knowledge or consent. Eaton was instructed by FINRA to turn over information and documents in response to those allegations. The stockbroker confirmed with FINRA that he received its request and that he would not comply with it. FINRA found that Eaton’s refusal to cooperate constituted the violation of FINRA Rules 2010 and 8210.
Eaton was registered with Commonwealth Financial Network between March 1, 1995 and October 28, 2019.