‘Rogue Informant’ Sues Puerto Rico Over Banking License Denial

(Bloomberg) -- Guy Gentile ran a stock brokerage. He spent years running sting operations as an FBI informant. Then, after he was arrested anyway, he beat the charges. Now his plan for his next act is hitting a snag.

Gentile, 42, wants to open a bank in Puerto Rico, but his application was rejected twice -- in part, according to a lawsuit he filed, because he "expressed himself disrespectfully" in a Bloomberg Businessweek story when he said he wanted to get a license plate reading "F--- YOU DOJ" and played a recording of himself rapping, "Bro, I’m going rogue."

Gentile sued Puerto Rico’s Commissioner of Financial Institutions on July 3, saying his right to free speech was violated and the regulator held his arrest against him, even though the Department of Justice’s criminal case was dismissed.

"This country was founded on the bedrock principle that speech cannot be penalized by the government," Gentile said in a complaint in federal court in San Juan, Puerto Rico. "The use of the word ‘f---’ in criticizing the government simply cannot contribute to the denial of any type of license."

Gentile owns an online brokerage, SureTrader, that’s based in the Bahamas and caters to day traders. He began working as an informant in 2012 after the FBI said he orchestrated two pump-and-dump schemes that suckered investors out of $17 million.

Wearing a wire, he gathered information that led to the arrest of a corrupt lawyer, a market-manipulating high-frequency trader and other financial crooks. The Justice Department brought charges against him in 2016, but the case was dismissed because prosecutors waited too long to file it. A related Securities and Exchange Commission lawsuit was also tossed out due to the statute of limitations, although the agency has appealed.

Gentile ran his brokerage while he was undercover, and he said in an interview Tuesday that the business has been growing. In May 2017, he applied for a license in Puerto Rico to open what’s called an "international financial entity." He said he wants to specialize in banking for small foreign financial institutions that have difficulty accessing the U.S. banking system.

Applicant’s Character

Puerto Rico’s finance commissioner, George R. Joyner, rejected Gentile’s application in February and again in June. Joyner said in his ruling, which is attached to the complaint, that he’s mandated by law to evaluate applicants’ character, integrity and experience. Among the reasons listed for the denial were Gentile’s failure to disclose the SEC lawsuit, the criminal charges, and Gentile’s use of “lewd language" in interviews with Bloomberg.

Joyner noted that Gentile posted a “Wolf of Wall Street” meme with the caption "F--- YOU ALL."

The commissioner didn’t respond to an emailed request for comment on the case.

Gentile, who wants a ruling forcing the commissioner to issue the license, says in the suit that it’s unfair to hold the criminal charges against him because the case was dismissed and he’s maintained his innocence all along. His lawyer, Adam Ford of Ford O’Brien LLP in New York, says the application didn’t ask for him to disclose the SEC’s suit. As for the cursing, Gentile said he bets the commissioner swears too.

"I’d love to get him on the stand and have him testify under oath that he’s never used the word f---," Gentile said in the interview. "He’s probably going to be saying it when he gets this lawsuit."

The suit is Mint Bank v. Office of the Commissioner of Financial Institutions of Puerto Rico, 18-cv-1441, U.S. District Court, District of Puerto Rico (San Juan).

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