October 20, 2020
On September 30, 2020, the Securities and Exchange Commission (SEC) released an Order Instituting Administrative Proceedings against former investment adviser representative Gerald Eaton, a resident of Acton, Massachusetts.
Eaton was associated with Commonwealth Financial Network from March 1995 to November 2019 when he was discharged on allegations of forgery and wrongful taking of property. From January 1996 to October 2019, Eaton was also a certified financial planner and insurance agent doing business under the name Heritage Financial Group (HFG), a firm owned by Eaton. Eaton also served as the CEO for HFG.
According to the SEC Order, Eaton pled guilty to one count of wire fraud, one count of mail fraud, and one count of aggravated identity theft. Eaton admitted that he engaged in a scheme and artifice to obtain money and property from investment accounts and insurance policies that he controlled and managed on behalf of his clients for over ten years. As part of the scheme, he forged client signatures on checks and other documents that allowed him to misappropriate the funds, converting to his own personal use including to pay his personal credit card bills and his home equity line of credit, among other things. From at least August 1999 to October 2019, Eaton converted over $3.7 million from at least 15 clients’ accounts.
Accordingly, the SEC deems it appropriate and in the public interest to impose sanctions, including barring Eaton from associating with any broker dealer, investment adviser, or other related association with the securities industry. The SEC also seeks to bar Eaton from participating in any offering of a penny stock. The Financial Industry Regulatory Authority (FINRA) already barred Eaton from associating with any FINRA member firm in any capacity on November 20, 2019.