Between 1987 and January 1995, Gregory L. Bowen was associated with four broker-dealers, including a stint with Government Securities Corporation ("GSC") from July 1987 to December 8, 1997, at which date the firm's Uniform Request for Broker-Dealer Withdrawal ("Form BDW") was deemed effective. Since 1999, Bowen has worked for various mortgage firms as a mortgage broker; and he currently conducts a mortgage origination business.
1999 SEC Bar
On October 27, 1999, the Securities and Exchange Commission (the "SEC") issued an Order Instituting Administrative Proceedings that resulted in Bowen's Bar from association with any broker or dealer, with the right to reapply for association after two years. Bowen was further ordered to pay a $33,664 disgorgement, $31,258 in interest, and a $5,000 civil penalty. ("1999 Bar Order").
The SEC had alleged that while employed with GSC from March 1989 through March 1994, Bowen willfully violated Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, by misrepresenting and omitting material information in his communications with clients in order to induce them to purchase high-risk collateralized mortgage obligations ("CMOs"). SeeExchange Act Release No. 42063 (Oct. 27, 1999). As a result of the 1999 Bar Order, Bowen was deemed statutorily disqualified under Section 3(a)(39)(B) of the Exchange Act.
SIDE BAR: Section 3(a)(39)(B) of the Exchange Act:
(39) A person is subject to a "statutory disqualification" with respect to membership or participation in, or association with a member of, a self-regulatory organization, if such person-
. . .
(B) is subject to-
(i) an order of the Commission, other appropriate regulatory agency, or foreign financial regulatory authority-
(I) denying, suspending for a period not exceeding 12 months, or revoking his registration as a broker, dealer, municipal securities dealer, government securities broker, government securities dealer, security-based swap dealer, or major security-based swap participant or limiting his activities as a foreign person performing a function substantially equivalent to any of the above; or
(II) barring or suspending for a period not exceeding 12 months his being associated with a broker, dealer, municipal securities dealer, government securities broker, government securities dealer, security-based swap dealer, major security-based swap participant, or foreign person performing a function substantially equivalent to any of the above;
(ii) an order of the Commodity Futures Trading Commission denying, suspending, or revoking his registration under the Commodity Exchange Act (7 U.S.C. 1 et seq.); or
(iii) an order by a foreign financial regulatory authority denying, suspending, or revoking the person's authority to engage in transactions in contracts of sale of a commodity for future delivery or other instruments traded on or subject to the rules of a contract market, board of trade, or foreign equivalent thereof; . . .
In response to and following its consideration of the submission of a Membership Continuance Application (the "MC-400″) concerning Bowen from First Liberties Financial, the Financial Industry Regulatory Authority ("FINRA") filed a notice containing an application ("Application") with the SEC seeking consent for Bowen to associate with First Liberties as a general securities representative. In the Application, FINRA and First Liberties represented that non-registered person Bowen would be employed as a general securities representative on the firm's institutional sales desk and compensated on a commission basis.
SIDE BAR: First Liberties, a FINRA member firm since 1983, services retail and institutional customers through its New York City home office and seven branches, where it employs 34 registered representatives and 13 registered principals.
In submitting its request to FINRA for permission to register Bowen, First Liberties proposed that:
In the Application, FINRA sought an order declaring that, notwithstanding Bowen's statutory disqualification, the SEC would not: