UNITED STATES SECURITIES AND EXCHANGE COMMISSION

SEC Admin Release 34-84163, IA Release 40-5033 / September 17, 2018: 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 15(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Section 203(f) of the Investment Advisers Act of 1940 ("Advisers Act") against John L. Gathright, Jr. ("Respondent" or "Gathright"). The Division of Enforcement alleges that on October 15, 2012, the United States District Court for the Western District of Louisiana accepted Gathright's guilty plea to one count of mail fraud in violation of 18 U.S.C. § 1341. United States v. John L. Gathright, Jr., Case No. 3:12-CR-00235. On January 7, 2013, a judgment in the criminal case was entered against Gathright. He was sentenced to a prison term of 41 months followed by three years of supervised release and was ordered to pay restitution in the amount of $1,148,379.10. In connection with that plea, Gathright admitted that between June 2010 and September 2011, he used his position at Merrill to cause companies maintaining annuities for his clients to issue checks for the supposed benefit of his clients and mail the checks to an address Gathright controlled. Gathright would deposit the checks into accounts he controlled and use the funds for his own benefit. The total amount of the checks exceeded $700,000.00.

Order

Bar (Permanent)

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

Indefinite

1/31/2019

participating in any offering of a penny stock

Indefinite

1/31/2019

FINRA

FINRA RULE 2010 AND 2150(A): GATHRIGHT BEGAN TO MISAPPROPRIATE FUNDS FROM ANNUITIES HELD BY HIS CUSTOMER AT HIS MEMBER FIRM. AMONG OTHER THINGS, GATHRIGHT HAD CUSTOMERS SIGN INCOMPLETE SURRENDER REQUEST FORMS. THESE FORM REQUESTED THAT THE ANNUITY COMPANY HOLDING THE CUSTOMERS' ANNUITIES MAIL THE SURRENDER CHECKS TO THE CUSTOMERS. AFTER OBTAINING CUSTOMER SIGNATURES, GATHRIGHT COMPLETED THE FORM BY ENTERING A RESIDENTIAL ADDRESS OF GATHRIGHT'S RELATIVE, OR HIS WORK ADDRESS AT THE FIRM AS THE MAILING ADDRESS FOR THE ACCOUNT. WITHOUT THE CUSTOMERS' KNOWLEDGE, GATHRIGHT CAUSED THE ANNUITY COMPANIES TO ISSUE CHECKS TO THE CUSTOMERS, SENDING THEM TO THE ADDRESS HE PROVIDED. GATHRIGHT DEPOSITED THE CHECKS INTO BANK ACCOUNTS OVER WHICH HE HAD CONTROL AND THEN WITHDREW FUNDS FOR HIS OWN BENEFIT. GATHRIGHT MISAPPROPRIATED AN AGGREGATE OF APPROXIMATELY $717,000 FROM TEN CUSTOMERS AND ATTEMPTED TO MISAPPROPRIATE FUNDS FROM ONE ADDITIONAL CUSTOMER.

Acceptance, Waiver & Consent(AWC)

Bar (Permanent)

All Capacities

Indefinite

9/6/2012

WITHOUT ADMITTING OR DENYING THE FINDINGS, GATHRIGHT CONSENTED TO THE DESCRIBED SANCTION AND TO THE ENTRY OF FINDINGS, THEREFORE HE IS BARRED FROM ASSOCIATION WITH ANY FINRA MEMBER IN ANY CAPACITY.

FRAUDS AND SWINDLES - Mail Fraud

Pled guilty