Erez Law is investigating claims regarding Bernard G. McGee (CRD #1203327, Cazenovia, New York). Following a FINRA hearing, McGee was barred from association with any FINRA member in any capacity; ordered to pay $236,202.50, plus interest, in restitution to a customer; and ordered to pay $59,264, plus interest, in disgorgement. See FINRA Case #2012034389202. McGee has appealed FINRA’s decision to the National Adjudicatory Council the sanctions are not in effect pending review. McGee was associated with Cadaret, Grant & Co., Inc. (April 2007 until October 2012) during the underlying events. The Form U-5 filed by Cadaret to terminated McGee’s registration stated that he was “permitted to resign” for “failure to disclose an outside business activity in violation of firm policies and procedures.” McGee currently is associated with Independent Financial Group, LLC (Cazenovia, NY).
FINRA found that McGee willfully failed to disclose to his customer that he would make nearly $60,000 on her purchase of a charitable gift annuity from an entity named 54F. FINRA also found that by failing to disclose the expected compensation, McGee made a material omission that violated section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5. In addition, FINRA found that McGee made an unsuitable recommendation to the customer by recommending the customer liquidate her variable annuities and invest in the charitable gift annuity. McGee failed to perform sufficient due diligence on either the entity or the charitable gift annuities to know whether the product was suitable for a customer, according to FINRA. FINRA also found that McGee failed to disclose to Cadaret his outside business activities with the entity, including accepting rent-free office space, taking steps to form a joint venture, and receiving a commission payment for referring a client.
FINRA further found that McGee willfully failed to timely update his form U4 to reflect the change of address for his securities business, and that McGee made false statements on his firm’s annual compliance questionnaires. McGee falsely responded that he had not engaged, without the firm’s permission, in any securities transactions or other investment activity that was not processed through the firm, and falsely represented that he had disclosed all his business-related email addresses, according to FINRA. Following the hearing, FINRA’s hearing officer found that the FINRA Department of Enforcement had failed to establish that McGee made a material misrepresentation to the customer regarding a purported impending tax liability, in violation of Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5. Accordingly, that charge was dismissed.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, Cadaret, Grant & Co. or Independent Financial Group may be liable for investment or other losses suffered by McGee’s customers.
If you were a client of Cadaret, Grant & Co. or McGee, and have suffered investment losses, financial irregularities, or purchased a charitable gift annuity from 54F, please contact Erez Law to explore your legal options. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies. To learn more, please call us at 888-840-1571 or complete our “contact form.”