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Gary Forrest Allegedly Sells Non-Traded REITs Associated With An Enourmous Ponzi Scheme

By June 26, 2019 No Comments

Gary Forrest was a Michigan based securities broker. He worked in the securities industry for thirty-one years. During his career, he was registered with three different securities firms.

His registrations included; Roney & Co. (1985-1988), Raymond James & Associates (1998-2007), and American Portfolios Financial Services (2007-2016). He is no longer working as a registered securities broker in any fashion.

Gary Forrest’s publicly available FINRA BrokerCheck report shows that he was sanctioned by FINRA in April 2019. The findings in this matter state that he took part in selling promissory notes related to the Woodbridge Group of Companies.

The Woodbridge Group of Companies was what is known as a non-traded REIT. What this means is that it was a privately traded security that was not traded on any public securities exchanges. Due to their private nature, their is a significant lack of over-sight involved in the selling of non-traded REITs. Numerous securities brokers, like Gary Forrest, used this lack of over-sight to their advantage when selling this unsuitable security to their customers.

It was determined by the Securities and Exchange Commission that Woodbridge spent years operating in plain sight as an enormous Ponzi scheme. The associated brokers, like Gary Forrest, sold promissory notes to customers that they claimed were backed by mortgages when, in fact, they were not.

To solicit these investments, these associated brokers told potential investors that they would receive an annual interest rate of 5 to 8 percent. This interest was supposed to be paid out in monthly installments to the investors. However, since the promissory notes were not actually backed by mortgages, there was very little profit being generated. Because of this, monthly dividends were being paid through money coming in through newer investors. This is how Ponzi schemes operate up until the entire thing collapses, which is, of course, what happened with Woodbridge when the company filed for bankruptcy.

Gary Forrest allegedly sold $826,986 worth of promissory notes to investors, some of whom were customers of his member firm. He received $25,905 in commissions through executing these transactions. Gary Forrest was allegedly denied permission to sell these REITs by his member firm; however, executed the transactions despite being forbade to. Due these alleged actions, Gary Forrest was fined $5,000, forced to repay the entire $25,905 in disgorgement, and suspended from acting as a securities broker in any fashion for a period of ten months.

Oakes & Fosher dedicates its entire legal practice to helping investors across the nation. If you, or someone you know, have lost money investing with Gary Forrest, please contact Oakes & Fosher for a free and private consultation.