Jack David Stone of Hillside Illinois a stockbroker and securities principal formerly registered with Forest Securities Inc. has been barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that Stone neglected to provide recorded testimony before FINRA personnel when he was investigated by the regulator for potentially (1) effecting unauthorized transactions in the accounts of one or more customers (2) exercising discretionary authority in Forest Securities customer accounts and (3) making false or misleading statements that pertained to investments. FINRA Arbitration No. 2017053685201 (Sept. 9, 2019).
According to the AWC, on August 9, 2019, Stone was contacted by FINRA in regard to the investigation into his potential unauthorized trading, discretionary trading, and misrepresentations. Stone was specifically asked to provide recorded testimony in regard to his activities. After having received the request, Stone obtained legal counsel who corresponded with FINRA on August 13, 2019 to reveal that Stone understood what FINRA expected of him under Rule 8210. FINRA was subsequently informed by Stone’s legal counsel that the stockbroker would not cooperate by providing recorded testimony as FINRA requested. FINRA determined that Stone’s failure to do so was violative of FINRA Rules 2010 and 8210.
This is not the first time that Stone has been sanctioned by a securities regulator for misconduct in the securities industry. In fact, Stone was fined $25,000.00 and barred by New York Stock Exchange (NYSE) from being a stockbroker, trader or supervisor according to a NYSE Hearing Panel Decision containing findings that Stone caused the records and books of his employing securities broker dealer to be altered, fabricated or otherwise inaccurate; neglected to accurately mark order tickets; made omissions about transactions; and established outside accounts contrary to his employing securities broker dealer’s policy; and provided false or misleading information to NYSE in regard to his activities. NYSE found Stone’s conduct violative of Securities and Exchange Commission (SEC) Regulations 240.17A-3, 240.17A-4; and Exchange Rules 440B.13, 410B, 352(c), 407(b) and 476(a)(4). Case No. HPD00-66.
FINRA Public Disclosure reveals that Stone has been identified in three customer initiated investment related disputes pertaining to allegations of his misconduct while he was employed with Birkelbach Investment Securities Inc. and Forest Securities Inc. Specifically, a customer initiated investment related complaint regarding Stone’s conduct was settled for $26,233.93 in damages founded on accusations of an inappropriate bond latter transaction being effected in the customer’s account when Stone was employed by Birkelbach.
Another customer initiated investment related arbitration claim concerning Stone’s activities was resolved for $100,000.00 in damages based upon allegations that during the time that Stone was employed by Birkelbach, the investment account was churned by him; fiduciary duties owed to the customer by the stockbroker had been violated; the customer’s contract had been breached; and options, government debt and corporate debt transactions executed in the customer’s account by Stone failed to be suitable.
On August 16, 2017, another customer filed an investment related arbitration claim regarding Stone’s conduct in which the customer requested more than $5,000.00 in damages supported by accusations that fiduciary obligations failed to be complied with; unauthorized trades were effected in the customer’s account; the investment portfolio was churned; and the customer had been defrauded in regard to the transactions Stone effected when he was employed by Forest Securities Inc. FINRA Arbitration No. 17-02211 (Aug. 16, 2017).
Stone’s employment with Forest Securities has been terminated as of August 29, 2019.
