Former Cadaret, Grant & Co. Broker, Gerald Dewes, Barred By FINRA For Failing Cooperate With Investigation Regarding Selling Away
Gerald Dewes (CRD # 2465538) was a Financial Advisor at Cadaret, Grant, & Co. Gerald Dewes has been in the securities industry since 1994 and previously worked for a number of brokerage firms, including Lincoln Financial Securities, Northeast Securities and Cambridge Investment Research.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), on March 30, 2020, FINRA barred Gerald Dewes indefinitely from acting as a broker or associating with any brokerage firm for refusing to provide on-the-record testimony requested by FINRA during its investigation into the conduct disclosed in a Form U5 submitted by his member firm. The investigation related to allegations that Gerald Dewes was engaged in undisclosed private securities transactions with clients, otherwise known as “selling away.”
Specifically, the FINRA sanction provided: “Without admitting or denying the findings, Dewes consented to the sanction and to the entry of findings that he refused to appear for on-the-record testimony requested by FINRA in connection with an investigation into his potential participation in undisclosed private securities transactions and outside business activities.”
For a copy of the FINRA sanction, click https://www.finra.org/sites/default/files/fda_documents/2019064639701%20Gerald%20Roger%20Dewes%20CRD%202465538%20AWC%20sl.pdf
The Financial Industry Regulatory Authority (FINRA) strictly prohibits financial advisors from “selling away” or selling securities and investments to clients that are not offered by the brokerage firm with which they are employed. For example, it is illegal and a violation of industry rules for a financial advisor to recommend or even suggest that a client invest in the financial advisor’s own business or a business operated by his or her friends or family. It is not necessary that the financial advisor earn any compensation for recommending an outside investment.
The purpose behind this prohibition is to ensure that a financial advisor only offers to sell securities that have been vetted by his or her employer brokerage firm through a rigorous due diligence process. Most brokerage firms have an approved list of investments, products, and research that can be provided or made available to clients. Any deviation by the financial advisor from the approved product list may constitute selling away.
This same alleged misconduct prompted Cadaret, Grant & Co. to terminate Gerald Dewes in November 2019.
In addition to the regulatory sanction, Gerald Dewes has been the subject of customer complaints during his career. In 2002, “CLIENT ALLEGES BROKER TRADED CLIENT IN A MANNER INCONSISTENT WITH THE STATED INVESTMENT OBJECTIVES, AND WAS NOT ADEQUATELY SUPERVISED BY BROKER DEALER.” The matter was settled for $25,000. Two other customer complaints have been filed against Gerald Dewes during his career.
For a copy of Gerald Dewes’ CRD, click https://brokercheck.finra.org/individual/summary/2465538#disclosuresSection.
Financial advisors have a legal and regulatory obligation to recommend only suitable investments that are appropriate for their clients’ needs and objectives. Their employing brokerage firm has a legal and regulatory obligation to supervise the Financial Advisors’ sales practices and dealings with clients. To the extent any of these duties are breached, the customer may be entitled to a recovery of his or her investment losses.
The Wolper Law Firm represents investors nationwide in securities litigation and arbitration on a contingency fee basis. Matt Wolper, the Managing Principal of the Wolper Law Firm, is a trial lawyer who has handled hundreds of securities cases during his career involving a wide range of products, strategies and securities. Prior to representing investors, he was a partner with a national law firm, where he represented some of the largest banks and brokerage firms in the world in securities matters. We can be reached at 800.931.8452 or by email at firstname.lastname@example.org.