Initiated By
FINRA
Allegations
FINRA BY-LAWS ARTICLE V, SECTION 2(C), NASD BY-LAWS ARTICLE V, SECTION 2(C), FINRA RULES 2010, 2150(A), 3270, 8210, NASD RULES 2110, AND INTERPRETATIVE MATERIAL-1000-1: MAYS CONVERTED AND MISUSED AT LEAST $30,968.58 IN CUSTOMER FUNDS BY PROVIDING FUNDS TO HIS EX-WIFE AND HIS FATHER WITHOUT THE CUSTOMER'S AUTHORIZATION. WHILE MAYS WAS ASSOCIATED AND REGISTERED WITH A MEMBER FIRM, HE SERVED AS THE CUSTOMER'S BROKER FOR HIS FIRM ACCOUNT. MAYS SOLICITED THE CUSTOMER TO INVEST $50,000 FOR A PERIOD OF ONE YEAR, TOLD THE CUSTOMER THAT HIS MONEY WOULD BE INVESTED IN STOCKS AND COMMODITIES, AND TOLD THE CUSTOMER THAT AFTER ONE YEAR, HE WOULD BE ABLE TO HAVE HIS PRINCIPAL RETURNED TO HIM OR TO OBTAIN A PARTNERSHIP INTEREST IN THE INVESTMENT PROGRAM. THE CUSTOMER PRESENTED MAYS WITH A CHECK FOR $50,000 DRAWN AGAINST THE CUSTOMER'S BANK ACCOUNT, TO BE INVESTED IN STOCKS AND COMMODITIES AS MAYS HAD REPRESENTED. AT MAYS' INSTRUCTION, THE CUSTOMER HAD MADE THE CHECK PAYABLE DIRECTLY TO MAYS. MAYS DEPOSITED THE CUSTOMER'S CHECK INTO A BANK ACCOUNT FOR A BUSINESS THAT MAYS CONTROLLED. MAYS GAVE HIS FAMILY MEMBERS $33,100 FROM THE BANK ACCOUNT. APPROXIMATELY $2,131.42 CAN BE ATTRIBUTED TO FUNDS DEPOSITED INTO THE ACCOUNT FROM SOURCES OTHER THAN THE CUSTOMER. THE REMAINDER OF THE $33,100 CAME FROM THE FUNDS INVESTED BY THE CUSTOMER. AS SUCH, MAYS GAVE AT LEAST $30,968.58 OF THE CUSTOMER'S MONEY TO HIS FAMILY MEMBERS. WHEN THE CUSTOMER GAVE MAYS THE CHECK, HE BELIEVED THAT HIS MONEY WOULD BE USED TO INVEST IN STOCKS AND COMMODITIES. HE DID NOT AUTHORIZE MAYS TO GIVE ANY OF HIS FUNDS TO MAYS' FAMILY MEMBERS. HE REQUESTED THAT MAYS RETURN HIS INVESTMENT. AFTER MAYS INITIALLY TOLD THE CUSTOMER THAT HE WOULD NOT BE ABLE TO RETURN HIS MONEY, HE REPAID THE CUSTOMER APPROXIMATELY $40,000. MAYS HAS NOT RETURNED THE REST OF THE CUSTOMER'S FUNDS. MAYS PARTICIPATED IN AN OUTSIDE BUSINESS ACTIVITY, INVOLVING THE BUSINESS THAT HE CONTROLLED, AS A PRINCIPAL AND CONDUCTED FINANCIAL OR EXPECTED COMPENSATION BUSINESS ON ITS BEHALF WHILE HE WAS ASSOCIATED WITH HIS FIRM, WITHOUT PROVIDING PRIOR WRITTEN NOTICE OF SUCH ACTIVITY TO THE FIRM. THEREFORE, MAYS ENGAGED IN THIS UNAPPROVED OUTSIDE BUSINESS ACTIVITY AND NEVER DISCLOSED TO THE FIRM HIS OUTSIDE BUSINESS ACTIVITIES. MAYS, WHILE ASSOCIATED WITH ANOTHER MEMBER FIRM, WILLFULLY FAILED TO AMEND HIS FORM U4 TO TIMELY DISCLOSE AN UNSATISFIED FEDERAL TAX LIEN FILED AGAINST HIM. THE EXISTENCE OF AN UNSATISFIED LIEN IS A MATERIAL FACT. GIVEN THAT MAYS WAS AWARE OF THE LIEN, HIS FAILURE TO DISCLOSE THE LIEN WAS A WILLFUL FAILURE TO DISCLOSE MATERIAL INFORMATION ON HIS FORM U4. MAYS FAILED TO PROVIDE THE INFORMATION AND DOCUMENTS REQUESTED BY FINRA IN CONNECTION WITH ITS INVESTIGATION.
Resolution
Decision
Bar
Bar (Permanent)
Registration Capacities Affected
All Capacities
Start Date
12/5/2014
Sanctions
Restitution
Amount
$10,000.00
Sanctions
INTEREST ON THE RESTITUTION.
MAYS IS STATUTORILY DISQUALIFIED FOR HIS WILLFUL FAILURE TO TIMELY AMEND HIS FORM U4.
Regulator Statement
DEFAULT DECISION RENDERED NOVEMBER 7, 2014. THE SANCTIONS WERE BASED ON FINDINGS THAT MAYS INTENTIONALLY TOOK A CUSTOMER'S MONEY AND USED IT FOR HIS OWN BENEFIT WITHOUT AUTHORITY. THE FINDINGS STATED THAT MAYS SOLICITED THE CUSTOMER TO INVEST $50,000 IN STOCKS AND COMMODITIES AND WITH THAT UNDERSTANDING THE CUSTOMER GAVE MAYS A CHECK MADE OUT TO HIM. MAYS USED AT LEAST $30,968.58 OF THE CUSTOMER'S MONEY FOR PERSONAL PURPOSES. LATER, THE CUSTOMER REQUESTED THAT MAYS RETURN THE INVESTMENT PRINCIPAL. MAYS INITIALLY TOLD THE CUSTOMER THAT HE WOULD NOT BE ABLE TO RETURN THE MONEY, BUT LATER REPAID THE CUSTOMER $40,000 OF HIS $50,000 INVESTMENT. THE FINDINGS ALSO STATED THAT WHILE ASSOCIATED WITH HIS MEMBER FIRM, MAYS WAS A REGISTERED AGENT AND SOLE MEMBER OF AN ENTITY. MAYS FAILED TO DISCLOSE THIS OUTSIDE BUSINESS ACTIVITY TO HIS MEMBER FIRM. THE FINDINGS ALSO INCLUDED THAT MAYS WILLFULLY FAILED TO TIMELY DISCLOSE A FEDERAL TAX LIEN IN THE AMOUNT OF $67,032.57 ON HIS FORM U4. FINRA FOUND THAT MAYS FAILED TO RESPOND TO FINRA'S REQUESTS FOR INFORMATION AND DOCUMENTS RELATED TO ITS INVESTIGATION INTO WHETHER HE HAD MISAPPROPRIATED FUNDS, OPERATED A PONZI SCHEME, AND ENGAGED IN UNAPPROVED OUTSIDE BUSINESS ACTIVITIES.
THE DECISION BECAME FINAL DECEMBER 5, 2014.
