Finra barred two former HD Vest Investment Services brokers who did not cooperate in an investigation of a real estate investment Ponzi scheme.
Finra barred Jerry Davis Raines and Donna Lynn Barnard for failing to provide documents and information the regulator requested regarding their participation in sales of promissory notes related to the Woodbridge Group of Companies.
Mr. Raines and Ms. Barnard were registered representatives for HD Vest from August 2014 through May 2017, when they were dismissed by the brokerage. They each have several disclosures on their BrokerCheck profiles involving allegedly unsuitable sales of Woodbridge securities.
Last year, the SEC charged the Woodbridge Group of Companies with running a $1.2 billion Ponzi scheme that targeted 8,400 investors. In August, the agency filed charges against five unregistered salespeople in the scheme.
In July, Finra sent requests for documents to Mr. Raines and Ms. Barnard. In August, their lawyers told Finra staff they would not respond. Failure to cooperate in an investigation is a violation of Finra rules that can result in an industry bar.
Neither Mr. Raines nor Ms. Barnard admitted or denied wrongdoing.
In a motion to dismiss a class action suit on Woodbridge sales filed last month in a Florida federal court, HD Vest argued that it never offered or sold Woodbridge investments, received money from Woodbridge or had any arrangements with Woodbridge. The motion was granted, according to HD Vest spokeswoman Andrea Dorsett.