The Financial Industry Regulatory Authority has barred former MML Investors Services broker, Gary Wayne Hammond, for allegedly participating in numerous private securities transactions and referring investors to his half-brother’s Ponzi schemes.
According to a letter of acceptance, waiver, and consent issued by FINRA, Hammond participated in at least 14 private securities transactions between February and October 2016 without providing notice to his firm.
The transactions totaled more than $1.6 million and involved investments in three limited liability companies controlled by his half-brother.
According to FINRA, Hammond participated in these transactions by referring investors to his half-brother, attending meetings about the investments and receiving compensation for his referrals – generally 6 percent of the funds raised, although this was lower in some instances where his half-brother had a preexisting relationship with an investor.
FINRA said that two of the limited liability company investments turned out to be Ponzi schemes. Hammond referred 10 customers, who invested a total of $1 million in the two fraudulent investments.
Hammond is also accused of giving false answers to questions in a June 2016 compliance questionnaire about whether he participated in private securities transactions or received referral fees outside of his firm.
MML terminated Hammond in April 2017 and filed several amended termination notices with FINRA, including one in April 2019, when the firm reported a new customer lawsuit.
According to his BrokerCheck profile, Hammond was associated with MSI Financial Services for 16 years until MML Investor Services acquired the firm in March 2017. He was briefly associated with Hornor, Townsend & Kent from August 2017 to December 2017.
Hammond consented to the bar without admitting or denying FINRA’s findings.