In January of this year, FINRA accepted a waiver signed by Gary L. Pevey. As part of the agreement, the broker consented to monetary sanctions and a one-year suspension.
Pevey, registered with Mutual Securities, Inc. at the time, allegedly engaged in private securities transactions without the knowledge of his member firm.
Between June of 2016 and August 2017, Pevey sold promissory notes in the Woodbridge Group of Companies, LLC (Woodbridge). The broker sold more than $1.11 million in notes to 15 investors, 5 of whom were customers of Mutual Securities.
He earned more than $40,000 in commissions on the transactions. In 2017, Woodbridge was found to be a fake front for a massive Ponzi scheme.
To avoid potential misconduct or conflicts of interests that expose firms and customers to risks, FINRA requires brokers to notify their member firms of private securities transactions. Brokers who fail to comply, face stiff penalties.
On top of the suspension, FINRA imposed monetary sanctions. Pevey is responsible to pay $10,000 in fines and return more than $40,000 to compensate the affected customers for their losses.
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