NOTE: Stipulations of Fact and Consent to Penalty (SFC); Offers of Settlement (OS); and Letters of Acceptance Waiver, and Consent (AWC) are entered into by Respondents without admitting or denying the allegations, but consent is given to the described sanctions & to the entry of findings. Additionally, for AWCs, if FINRA has reason to believe a violation has occurred and the member or associated person does not dispute the violation, FINRA may prepare and request that the member or associated person execute a letter accepting a finding of violation, consenting to the imposition of sanctions, and agreeing to waive such member's or associated person's right to a hearing before a hearing panel, and any right of appeal to the National Adjudicatory Council, the SEC, and the courts, or to otherwise challenge the validity of the letter, if the letter is accepted. The letter shall describe the act or practice engaged in or omitted, the rule, regulation, or statutory provision violated, and the sanction or sanctions to be imposed.

Richard G. Mailloux Sr.
AWC/2009017337801

Mailloux participated in private securities transactions without prior written notice to, or prior written approval from, his member firm. Mailloux referred customers to another registered representative of the firm, who executed promissory notes, called “private investor agreements,” with the customers on a corporation’s behalf. The findings also stated that the promissory notes, which were securities, indicated that the corporation promised to pay 10 percent and 12 percent annual interest, respectively, in return for the loans. The corporation subsequently defaulted on its payment obligations to Mailloux’s customers, who incurred significant losses, and Mailloux did not inform his firm about his customers’ investments.

Mailloux received a finder’s fee of $500 from the firm’s other registered representative for the investment one of the customers made.

Richard G. Mailloux Sr. : Fined $5,000; Ordered to disgorge ill-gotten gains and pay a partial restitution to a customer in the amount of $500, plus interest, Suspended 6 months

Tags: Promissory Notes