In August 2013, FINRA announced that New York Registered Representative Michael Anthony Gigante submitted a Letter of Acceptance, Waiver and Consent in which he was fined $15,000 and suspended from association with any FINRA member in any capacity for 60 days. Without admitting or denying the findings, Gigante, who had been registered with MML Investor Services, LLC and MetLife Securities, consented to the described sanctions and to the entry of findings that he engaged in an undisclosed business activity by referring member firm customers to a mortgage broker associated with an entity that offered mortgage brokerage services and investment opportunities.

FINRA’s findings stated that Gigante’s firm’s written policies and procedures prohibited registered representatives from engaging in any new or previously undisclosed outside business activity with or without compensation, until the firm had formally approved the activity. Gigante did not receive any monetary compensation from referring customers to the mortgage broker. Gigante made the referrals hoping that the mortgage broker would reciprocate by referring clients to Gigante at his firm. Gigante did not report to his firm that he was referring potential investors to the mortgage broker, nor did he seek the firm’s permission to make these referrals. The findings also stated that on firm compliance questionnaires, for two years, Gigante failed to disclose that he was referring customers to the mortgage broker and represented that he was not engaging in any outside business activities. Unbeknownst to Gigante, the mortgage broker’s operation was a Ponzi scheme that eventually unraveled, causing the participants to lose all of their investments without seeing any return.

The findings reflected that after the firm conducted an internal investigation, it became aware of Gigante’s unapproved outside business activity and terminated his employment. It was unclear whether customers initiated FINRA arbitrations, or any other type of securities arbitration.  However, it appears from Gigante’s CRD that MetLife settled one customer complaint for $168,500.00.