Alex Williams (CRD# 2646185), a broker and investment adviser based in New York, has received a pending customer complaint. According...Read More
Tom Gallo: Former Corinthian Partners Broker Suspended Over NGT Notes
A disciplinary action taken by the Financial Industry Regulatory Authority against former New York City broker Tom Gallo (CRD# 1705791) suspended him over allegations he negligently misrepresented a material fact connected to the sale of promissory notes. A former representative of Corinthian Partners and Newbridge Securities Corporation, Gallo was fined $25,000 and suspended for 18 months.
According to a Letter of Acceptance, Waiver and Consent (No. 2017053921601) dated February 2019, Tom Gallo solicited two investors between August 2014 and October 2014 to invest $50,000 each in a convertible promissory note issued by NGT, Inc. According to FINRA, the private placement’s aim was to give NGT a bridge loan to finance its operations until it held an initial public offering to raise long-term financing. Gallo’s member firm at the time, Corinthian Partners, was acting as placement agent for the private placement, and Gallo was compensated a sum of $8,000 related to his role in the offering.
FINRA’s findings state that he was “aware of significant negative financial information about the company,” for instance its “history of losses, lack of working capital,” and certain doubts about the company’s prospects expressed by a public accountant. However, according to FINRA, Tom Gallo “mistakenly believed that NGT had an agreement” with another broker-dealer firm to conduct a “firm initial public offering that would raise needed capital for NGT.” In spite of this belief, according to FINRA, such a binding agreement did not exist, and he neglected to confirm whether it existed. FINRA’s findings go on to state that Gallo “negligently represented to the investors” that the company had a firm commitment offering; FINRA states that this misrepresentation was significant because the company’s ability to pay interest on the notes, and the investors’ ability to recover their principal investments, hinged on whether the company raised a substantial amount of capital in its anticipated IPO, “and/or on the ability of the investors to sell NGT stock that they received in connection with the Private Placement.”
The IPO was conducted in October 2015 “on a best-efforts bases,” according to FINRA, however, it failed to raise the “anticipated level of capital.” Following this IPO, the company’s stock price declined “significantly,” and the two investors in question lost approximately $33,337 in total funds from the private placement. FINRA’s findings state that these contraventions constituted violations of securities law and FINRA rules. As a result of the foregoing alleged conduct, Tom Gallo was suspended from associating with any FINRA member firm in any capacity for 60 days. He was also ordered to pay a fine of $10,000 as well as restitution to one of the customers.
Tom Gallo is not currently registered as a broker or investment advisor. His employment history includes Spartan Capital Securities, Newbridge Securities, Corinthian Partners, Garden State Securities, Kirlin Securities, MS Farrell & Company, DH Blair & Company, and Shearson Lehman Hutton. He currently holds no state licenses and has passed five securities industry qualification examinations.