Gregory Walter McCloskey (also known as Gregory Walter Meier) of Newport Beach California a stockbroker formerly registered with Westpark Capital Inc. has been charged by Financial Industry Regulatory Authority (FINRA) Department of Enforcement with selling away from the securities broker dealer, obstructing the regulator’s investigation and falsifying information in its investigation. Department of Enforcement v. Gregory Walter McCloskey, Disciplinary Proceeding No. 2018059242801 (Dec. 1, 2020).
According to the Complaint, from 2008 to 2018, while McCloskey was associated with Newport Coast Securities Inc. and Westpark Capital, he took part in two securities transactions involving an elderly customer named Customer A. These transactions purportedly took place outside of the auspices of those securities broker dealers and without their permission. McCloskey allegedly attempted to conceal transactions from his employers and the regulator.
In the first transaction, the customer was allegedly solicited by McCloskey to buy $20,000.00 in the stock of a technology company which established a wireless network system to manage lighting for purposes of energy conservation. That transaction was allegedly kept hidden from Newport Coast Securities.
McCloskey was contacted by FINRA as part of an investigation into his purported private securities transaction. The Complaint alleges that McCloskey did not tell FINRA about all of his selling away activities when prompted by the regulator to identify his customers who made investments in the technology company. McCloskey purportedly relayed to FINRA that some customers made investments in the company. The stockbroker allegedly failed to identify at that time that Customer A was one of them.
FINRA stated that in May of 2017, it suspended and fined McCloskey $5,000.00 based on findings that he took part in unapproved private securities transactions with at least two of the customers of the securities broker dealer. McCloskey was not found at that time to have been at fault for Customer A’s transactions since Customer A was not made known to FINRA by the stockbroker.
The Complaint alleged that in April of 2018, a written complaint had been submitted to McCloskey from Customer A. The customer’s complaint concerned the undisclosed private securities transaction. This supposedly led McCloskey to have his sibling purchase the customer’s investment in November of 2018. That sibling’s transaction was also not disclosed by McCloskey to his employer.
FINRA began investigating McCloskey again after discovering that Customer A had complained about his selling away activities. In August of 2018, while McCloskey was being investigated, he contacted Customer A to urge them to falsely tell FINRA that McCloskey did not take part in the customer’s transaction. Customer A was purportedly offered the opportunity to keep the funds provided by McCloskey’s sibling if this false written statement was communicated by the customer. FINRA asserted that Customer A did not approve of the arrangement.
The Complaint also alleges that McCloskey used a private email account to correspond with the customer so that the stockbroker could avoid alerting Westpark Capital regarding his actions. FINRA contended that McCloskey also falsified a Personal Activity Questionnaire to conceal his activities. McCloskey allegedly misled the regulator too by claiming that he did not receive any customer complaints and that he did not use a private communication system to correspond with customers. FINRA also noted that McCloskey allegedly lied about engaging in private securities transactions and about sending his own unofficial account statements to his customers.
FINRA also alleged that McCloskey lied to WestPark Capital by indicating in an annual compliance questionnaire that he did not solicit or arrange any private securities transactions. FINRA Department of Enforcement contended that McCloskey’s selling away activities were violative of FINRA Rules 2010 and 3280. Department of Enforcement also alleged that McCloskey’s false statements to the regulator and his obstruction of its investigation constituted the violation of FINRA Rules 2010 and 8210. The regulator also alleged that McCloskey’s falsification of books and records and use of unauthorized communication devices constituted the violation of FINRA Rule 4511.
FINRA Public Disclosure shows that on April 30, 2018, a customer filed an investment related complaint involving McCloskey’s conduct where the customer sought $20,000.00 in damages based upon accusations that the customer had been charged excessive fees and had been placed into unsuitable private placements while McCloskey was registered with Newport and WestPark. According to the complaint, McCloskey’s private placements were misrepresented and unsuitable.
McCloskey was terminated by WestPark Capital founded on allegations of his failure to comply with a heightened supervision arrangement while at the firm.
