ADMINISTRATIVE PROCEEDING
File No. 3-19915

August 13, 2020 - The Securities and Exchange Commission today announced settled charges against Garrett Gaylor, a registered representative at Joseph Stone Capital, LLC, a broker-dealer located in Mineola, New York, for defrauding twelve retail customers.

According to the SEC's order, Gaylor recommended to his customers a high-cost trading strategy that involved frequent trading with short holding periods that, when combined with substantial commissions and fees, virtually guaranteed that those accounts could not turn a profit. Gaylor's trading strategy resulted in losses in the accounts of all twelve customers. Further, the order finds, Gaylor regularly executed unauthorized trades in the customer accounts.

The SEC's order finds that Gaylor violated the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Without admitting or denying the allegations, Gaylor agreed to a cease-and-desist order, an industry bar, and a penny stock bar. Gaylor also agreed to pay disgorgement plus prejudgment interest, although payment was waived based on Gaylor's financial condition.

The SEC's investigation was conducted by Tuongvy Le, David Stoelting, Roseann Daniello, Ricky Tong, Michael Fioribello, and Sandeep Satwalekar in the New York Regional Office. The case was supervised by Sanjay Wadhwa. The examination that led to the investigation was conducted by the Office of Compliance Inspections and Examinations' Risk Analysis Examination Team.