Hector Anthony May of New City New York a stockbroker formerly employed by Securities America Inc. is the subject of a customer initiated investment related arbitration claim in which the customer requested $18,000,000.00 in damages based upon allegations that (1) the customer’s funds were converted and misappropriated (2) a fiduciary duty which was owed to the customer had been breached as it pertained to investments including real estate securities (3) information was concealed from the customer regarding securities transactions and (4) the customer was defrauded because of May’s activities between 2001 and 2018 while registered with Securities America. Financial Industry Regulatory Authority (FINRA) Arbitration No. 19-03844 (Jan. 10, 2020).
FINRA Public Disclosure indicates that May is the subject of two more customer initiated investment related disputes pertaining to allegations of his misuse of customer funds during the period in which he was employed by Securities America. On December 14, 2018, a customer initiated investment related arbitration claim pertaining to May’s conduct was settled for $406,510.00 in damages supported by allegations that the customer’s funds had been misappropriated by the stockbroker. FINRA Arbitration No. 18-03163.
According to the claim, there was a breach of both a contract and a fiduciary duty that was owed to the customer in regard to the customer’s investments. The claim also alleged that the customer was defrauded.
On December 17, 2018, another customer initiated investment related arbitration claim in reference to May’s conduct was resolved for $3,950,908.00 in damages based upon allegations of May’s misappropriation of customer funds while registered with Securities America. FINRA Arbitration No. 18-02230.
On December 13, 2018, May was charged by Securities and Exchange Commission (SEC) with misappropriating $7,900,000.00 in funds from advisory customers. Securities and Exchange Commission v. Hector A. May et al. Civil Action No. 7:18-cv-11668.
The Complaint alleged that a fraudulent scheme had been perpetrated by May which affected fifteen customers. Funds were allegedly solicited by May for bond purchases but diverted for his own personal benefit. SEC alleged that fake account documents were designed by May and then disseminated to his customers. These statements allegedly falsely portrayed customers’ holdings which led them to believe that their accounts were growing in value. SEC indicated that in a Ponzi scheme like manner, newer investors’ funds were used by May to pay prior investors.
On December 27, 2018, May was permanently enjoined from engaging in future fraudulent actions violative of Securities Exchange Act of 1934 Section 10(b) and SEC Rule 10b-5 as well as Investment Advisors Act Section 206(2). Civil Action No. 7:18-1168-VB (S.D.N.Y.).
On February 14, 2019, SEC barred May from being a stockbroker or an investment advisor according to an Administrative Order based on findings of May’s fraudulent actions. In the Matter of Hector A. May. Administrative Proceeding File No. 3-18998.
SEC noted that on December 13, 2018, May pled guilty to one count of investment adviser fraud and one count of conspiracy to commit wire fraud. Criminal Action No. 18-CR-880. On July 31, 2019, May was sentenced to thirteen years behind bars.
Securities America discharged May on March 9, 2018 based upon allegations of the stockbroker’s misappropriation of customer funds.