The Securities and Exchange Commission (SEC) announced that it has barred Jeffrey E. Gallagher from the securities industry. Gallagher pleaded guilty to one count of wire fraud, three counts of engaging in monetary transactions in property derived from specified unlawful activity and two counts of tax evasion. Gallagher was sentenced to three years in prison, followed by three years of supervised release. He was ordered to pay $616,535 in restitution to his victims and $69,377 in restitution to the IRS. Gallagher had acted as an unregistered broker-dealer from 2008 until 2012 and was accused of running an investment scam during that time. A total of $617,475 of investor money was lost and he also used $249,703 of the 23 victim’s money for his own personal benefit. He did not report the money to the IRS. Gallagher pled guilty to one count of mail fraud and three counts of interstate transportation of stolen property based on his illegal and unauthorized options trading while employed as a stockbroker at PaineWebber Inc. He was sentenced to 15 months in prison. The SEC barred Gallagher from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent or nationally recognized statistical rating organization, and from participating in the offer or trading of any penny stocks.
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