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Regulation and Compliance > Federal Regulation

FINRA Fines Ex-Broker Who Covered Up Conviction for Sex With a Minor

By Jeff Berman

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What You Need to Know

  • The former broker at Primerica subsidiary PFS Investments was charged with three felonies.
  • The ex-broker had 30 days to disclose to the firm he was charged with the felonies and did not do so.
  • His felony conviction disqualifies him from associating with a FINRA member for 10 years.

The Financial Industry Regulatory Authority fined a former broker at Primerica subsidiary PFS Investments (PFSI) $5,000 and suspended him for six months for not disclosing to the firm that he was charged with three felonies and pleaded guilty to one of them, according to the regulator.

The former broker, Jason Vincent McHenry, was convicted of unlawful intercourse with a minor, according to a disclosure on his report at FINRA’s BrokerCheck website. The two other felonies — for sodomy with a person under 18 and possession of material depicting a minor in a sexual act — were dismissed, according to BrokerCheck.

Without admitting or denying the findings of FINRA’s investigation, McHenry signed a FINRA letter of acceptance, waiver and consent March 18 in which he consented to the imposition of FINRA’s sanctions. FINRA signed the letter Wednesday.

McHenry is no longer registered as a broker, according to BrokerCheck. The fine will come due if he reassociates with a member firm. Under FINRA rules, the felony conviction disqualifies him for 10 years from associating with a member firm.

McHenry could not immediately be reached for comment and there was no attorney representing him noted on the AWC letter. Primerica did not immediately respond to a request for comment.

Failure to Disclose

McHenry was registered with PFSI from November 2015 until November 2020, according to his BrokerCheck report. In a Form 5 termination notice dated Nov. 13, 2020, PFSI reported McHenry’s discharge “due to the nature of the disclosure event,” according to the FINRA AWC letter.

From October 2018 through November 2020, McHenry “willfully failed to timely amend” his U4 form to disclose to PFSI that he had been charged with three felonies and pleaded guilty to one felony, FINRA alleged.

McHenry was charged with the felonies on Sept. 18, 2018, while associated with PFSI, according to FINRA. Although McHenry was required to update his response to Question 14A on his U4 form within 30 days, he did not amend the form to disclose the felony charges until Nov. 13, 2020, “more than two years late,” FINRA said.

On Sept. 15, 2020, McHenry pleaded guilty to a felony charge, which “rendered him statutorily disqualified from associating with a member firm,” according to FINRA. Although McHenry was required to update his response to Question 14A within 10 days, he did not amend the form to disclose the guilty plea until Nov. 13, nearly two months late, FINRA said.

“The felony charges and guilty plea were material facts that a reasonable employer or customer would want to know about a representative,” the regulator noted.

In addition, on Dec. 1, 2018 and June 12, 2019, while completing PFSI’s annual compliance questionnaires, “McHenry falsely stated that he had not been charged with any felony,” according to FINRA.

As a result of his actions, McHenry violated Article V, Section 2(c) of FINRA’s By-Laws and FINRA Rules 1122 (regarding the filing of misleading information about membership or registration) and 2010 (governing standards of commercial honor and principles of trade), FINRA said.

Jeff Berman

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