UNITED STATES SECURITIES AND EXCHANGE COMMISSION

The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted pursuant to Section 203(f) of the Investment Advisers Act of 1940 ("Advisers Act") against Gregory Alan Smith ("Smith" or "Respondent"). The Commission finds that between December1999 through July 2010, Smith was associated with New England Securities Corp., a registered broker-dealer. In July 2010, Smith was permanently barred from association with any FINRA member in any capacity, in part, for misappropriating investor funds. From at least April 2013 until August 2014, Smith offered and sold to at least 29 investors participation rights in various historical or Prerevolutionary Chinese bonds. On July 23, 2019, Smith pleaded guilty to one count of conspiracy to commit wire fraud, in violation of Title 18, United States Code, Section 1349 before the United States District Court for the Western District of Louisiana, in United States v. Kirbyjon Caldwell et al. 5:18:cr-00084- 01. In connection with the plea, Smith admitted that between April 2013 and January 2016, he engaged in and conspired with others to engage in a scheme to defraud that involved materially misrepresenting to individuals that he would invest their money in "historical Chinese bonds." Smith convinced investors that he and Kirbyjon Caldwell, were putting a deal together; that Caldwell had the bonds in his possession or was in the process of obtaining them; that Caldwell was brokering a deal to sell the bonds and that investors would receive exponential returns on his or her investment in a short period of time. None of the individuals were told that the bonds had no intrinsic value or that the bonds' only value was as memorabilia. They also were not told that no previous investor had obtained the promised return on investment. If the individuals lacked the liquid asset to invest, Smith encouraged them to cash out annuities. The investors were advised to wire their investment funds from their financial institutions located in the Western District of Louisiana to one of three accounts held outside the State of Louisiana. In total $3.5 million was "invested" in these bond deals.

Order

Bar (Permanent)

association with a broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or NRSRO

Indefinite

6/26/2020

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

The Securities and Exchange Commission (the "Commission") alleges that the Commission brings this action to enjoin Gregory Alan Smith ("Smith") and another individual ( collectively "Defendants") from further violations of the registration and antifraud provisions of the federal securities laws by offering and selling participation rights in certain historical Chinese bonds (the "bonds") to mostly vulnerable and elderly investors, some of whom liquidated their annuities to invest in this scheme. Between approximately April 2013 and August 2014, Defendants raised at least $3,488,500 through a scheme to defraud approximately 29 investors through the fraudulent offer and sale of the bonds. Among other material misrepresentations and omissions, Defendants falsely represented to these investors that the bonds were safe, risk-free, worth tens, if not hundreds, of millions of dollars, and could be sold to third parties. In reality, the bonds were mere collectible memorabilia with no investment value. Both Smith and the other individual exerted control and influence over the scheme, and offered credibility to the investment by, respectively, being a well-known pastor and claiming to be an investment adviser. Smith violated Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 ("Securities Act"), Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940 ("Advisers Act").

Judgment Rendered

Disgorgement

$1,080,000.00

Monetary Penalty other than Fines

Injunction

Undertakings

FINRA

ARTICLE V, SECTION 2 OF FINRA'S BY-LAWS, FINRA RULES 1122, 2010, 2150, NASD RULES 2110, 2330(A), 3040, INTERPRETATIVE MATERIAL 1000-1 - GREGORY ALAN SMITH SOLICITED INDIVIDUALS, INCLUDING FIRM CUSTOMERS, TO INVEST IN A MEDICAL INSTRUMENT COMPANY AND OBTAINED IN AGGREGATE $135,000 FROM THE INVESTORS TO PURCHASE COMMON STOCK. SMITH DID NOT PROVIDE THE INVESTORS WITH A CONFIRMATION, STOCK CERTIFICATE NOR ANY OTHER FORM OF PAPERWORK TO DOCUMENT THEIR PURCHASE OF THE COMMON STOCK. SMITH'S PARTICIPATION IN THE SALE OF THE COMMON STOCK WAS OUTSIDE THE REGULAR SCOPE OF HIS EMPLOYMENT WITH HIS MEMBER FIRM; SMITH FAILED TO FOLLOW PROCEDURES AND FAILED TO GIVE HIS FIRM PRIOR WRITTEN NOTIFICATION. SMITH DEPOSITED THE INVESTORS' FUNDS INTO HIS BUSINESS BANK ACCOUNT, OVER WHICH HE EXERCISED CONTROL, FORWARDED ONLY $75,000 TO PURCHASE STOCK AND RETAINED THE REMAINING $60,000 FOR OVER THREE YEARS IN HIS ACCOUNT, WHICH AT TIMES MAINTAINED A BALANCE BELOW $60,000 AND ON ONE OCCASION, HAD A NEGATIVE BALANCE. SMITH COMMINGLED THE INVESTORS' FUNDS IN HIS BUSINESS BANK ACCOUNT WITH OTHER FUNDS AND CONVERTED THE INVESTORS' FUNDS TO HIS OWN USE AND BENEFIT. SMITH SETTLED WITH THE INVESTORS, PAYING A TOTAL OF $161,250; EACH INVESTOR RECEIVED AT LEAST THE PRINCIPAL INVESTED AND ONE INVESTOR RECEIVED MORE THAN HIS ORIGINAL INVESTMENT. EACH CUSTOMER EXECUTED A SETTLEMENT AGREEMENT/GENERAL RELEASE WITH SMITH. SMITH DID NOT ADVISE HIS FIRM OF TWO OF THE SETTLEMENTS UNTIL AFTER THEY WERE COMPLETED AND SETTLED WITH EACH OF THE INVESTORS, WITHOUT THE FIRM'S APPROVAL OR AUTHORIZATION. SMITH WILLFULLY FAILED TO AMEND HIS FORM U4 WITH MATERIAL INFORMATION REGARDING TAX LIENS.

Acceptance, Waiver & Consent(AWC)

Bar (Permanent)

All Capacities

Indefinite

7/24/2012

WITHOUT ADMITTING OR DENYING THE FINDINGS, SMITH CONSENTED TO THE DESCRIBED SANCTION AND TO THE ENTRY OF FINDINGS; THEREFORE, HE IS BARRED FROM ASSOCIATION WITH ANY FINRA MEMBER IN ANY CAPACITY. THIS SETTLEMENT INCLUDES A FINDING THAT SMITH WILLFULLY OMITTED TO STATE A MATERIAL FACT ON A FORM U4 AND THAT UNDER SECTION 3(A)(39)(F) OF THE SECURITIES EXCHANGE ACT OF 1934 AND ARTICLE III, SECTION 4 OF FINRA'S BY-LAWS, THIS OMISSION MAKES HIM SUBJECT TO A STATUTORY DISQUALIFICATION WITH RESPECT TO ASSOCIATION WITH A MEMBER.