FINRA Bars Gary Hammond For Selling Away And Ponzi Schemes

Gary Hammond (Gary Wayne Hammond CRD# 2660432) is a previously registered broker and investment advisor who last worked for Hornor, Townsend & Kent, Inc. and MML Investors Services, LLC in Charlotte, North Carolina for brief periods in 2017, but spent the bulk of his career registered with MSI Financial Services, Inc., also located in Charlotte, North Carolina. Hammond worked in the industry since 1995.

Gary Hammond Discharged By Employer For Selling Away And Violation Of Company Policies

According to Hammond’s FINRA BrokerCheck Report, published by the Financial Industry Regulatory Authority (FINRA), in April 2017, MML Investors Services terminated Hammond “in connection with an internal review relating to company policy as to the handling of a customer complaint and selling away.” “Selling away” is the industry term that refers to the practice of selling products not endorsed or sold by the firm.

FINRA Investigation Leads To Permanent Bar From Brokerage Industry

FINRA’s investigation found that from February through October of 2016, Hammond solicited transactions totaling $1,638,000 without providing notice to his firm. This conduct is called “selling away” and, according to FINRA’s Letter of Acceptance, Waiver, and Consent (AWC) with Hammond, violated FINRA Rules 3280 and 2010.

FINRA’s investigation revealed, among other things, that:

The transactions, totaling $1,683,000, involved investments in three limited liability companies controlled by Hammond’s half-brother
Hammond referred investors to his half-brother, attended meetings about the investments, and received compensation for his referrals
Two of the limited liability company investments turned out to be Ponzi schemes

MSI Financial Has Settled Four Securities Claims Involving Hammond

According to Hammond’s CRD Report, four customer disputes brought against Hammond in 2018-2019 have been settled. Each of these disputes alleged “Unfair and Deceptive Trade Practices and State Securities Fraud regarding the advisor’s recommendation to invest in private securities”. MSI Financial Services settled each of these claims for $680,000, $86,000, $1,190,000, and $975,000.

Two additional investor disputes are pending against Hammond, each of which raises the same allegations.

Brokerage firms like MSI Financial have a responsibility to supervise their representatives so as to prevent “selling away” like the misconduct described in complaints against Hammond. This includes properly and diligently supervising registered representatives to ensure securities rules and regulations as well as internal policies and procedures are followed. Failure to do so could result in liability for brokerage firms if, for example, the financial advisor recommends a private securities transaction that turns out to be a Ponzi scheme.

Did You Invest With Gary Hammond?

Silver Law Group represents investors in securities and investment fraud cases nationwide to help recover investment losses due to stockbroker misconduct. Our Ponzi scheme and “selling away” attorneys are ready to help. If you have any questions about how your account has been handled, call to speak with an experienced securities attorney. Most cases are handled on a contingency fee basis, meaning that you won’t owe us until we recover your money for you. Contact us today and let us know how we can help.