FINRA Alleges Brokers Refused to Testify in Investigation Into Penny Stock Transactions

The Financial Industry Regulatory Authority (FINRA) has filed a complaint against two brokers who allegedly refused to testify in an investigation tied to penny stock dealings. Regulators say Jeffrey K. Galvani (CRD #3048728) and Stuart A. Jeffery (CRD #5241790) declined to cooperate with requests for sworn testimony, a move FINRA claims obstructed its probe into outside business activities and private securities transactions (Case #2020068865301).

Why FINRA Filed the Complaint

According to the complaint, FINRA is investigating the respondents’ outside business activities and private securities transactions, including their involvement with outside entities that provided services to customers trading low-priced securities, often referred to as “penny stocks.” 

As part of their inquiry, FINRA issued requests for on-the-record testimony pursuant to FINRA Rule 8210. This rule authorizes FINRA to require registered representatives and other associated persons to provide information, documents and testimony during an investigation. The requests, sent on May 12, 2025, directed Galvani to appear on June 3, 2025, and Jeffery on June 5, 2025. Delivery records confirm that their counsel received the requests, but the respondents declined to appear, stating they were no longer registered and did not intend to seek registration in the future.

FINRA alleges that both respondents failed to appear for testimony and did not request alternative dates, postponements or extensions. This refusal, the complaint states, significantly impeded FINRA’s investigation and also violated FINRA Rule 2010, which requires brokers to observe high standards of commercial honor and just principles of trade.

At this stage, these are allegations only. No findings of fact or disciplinary sanctions have been issued. If the respondents do not answer the complaint, FINRA may proceed with disciplinary actions, which can include fines, suspensions or permanent bars from the securities industry.

How to Get Help if You’ve Been Affected

A FINRA complaint signals that regulators are actively investigating potential misconduct. While no findings have been made yet in this case, these proceedings can have serious implications for investors who worked with the named brokers or firms.

If you have concerns about your accounts or believe you may have been affected by actions under investigation, it’s important to understand your rights and explore potential recovery options.

Sonn Law Group represents investors nationwide in cases involving broker misconduct, regulatory violations and FINRA investigations. We work on a contingency fee basis, meaning you pay nothing unless we recover compensation on your behalf.

For a free, confidential consultation, call 833-912-3000 or complete our online form.