On June 1, 2018, the Financial Industry Regulatory Authority, Inc. (FINRA) permanently barred Christopher Todd Wendel from associating with firms registered with FINRA. FINRA registers and regulates stockbrokers and brokerage firms.
In a Letter of Acceptance, Waiver and Consent (AWC), FINRA stated it barred Wendel because he engaged in unapproved private securities sales and gave false sworn testimony and a signed statement and during FINRA’s investigation.
FINRA said it investigated Wendel’s private securities transactions involving sales of promissory notes in Woodbridge Mortgage Investment Funds, a widely reported Ponzi scheme. Wendel falsely told FINRA in writing and testimony that he sold the Woodbridge notes after leaving his firm, SA Stone Wealth Management, said FINRA.
Wendel was employed as broker with SA Stone from September 2014 through September 2017. Before he joined SA Stone, Wendel’s customers filed five claims alleging he committed misconduct that included placing unauthorized trades and recommending unsuitable investments. One claim was denied and one closed with no action while three settled for $130,936, $200,000, and $90,000.
In April 2017 SA Stone disclosed it was investigating Wendel for selling unapproved products, and on September 5, 2017 SA Stone reported it discharged Wendel for selling away. Wendel’s discharge was followed by another customer claim filed in February 2018 alleging $150,000 in losses for unsuitable investment recommendations.
Private Securities Transactions
Private securities transactions involve securities a broker promotes or sells that were not preapproved for sale by their firm. Brokers must obtain their firm’s approval before engaging in private securities transactions, and failure to do so is a violation called “selling away.” Selling away generally involves risky investments, sometimes even Ponzi schemes. Firms must reasonably supervise their brokers to prevent their misconduct. Firms may be liable for their broker’s violations, even if unaware it occurred.
Wendel’s alleged selling involved the Woodbridge Mortgage Fund, a massive fraud. The Securities Exchange Commission (SEC) charged the Woodbridge Mortgage Fund owner, Robert Shapiro, and its operators with wire fraud and money laundering. The SEC alleged the funds were a Ponzi scheme bilking over 8,400 investors out of more than $1.22 billion. Sellers of the notes allegedly deceived investors by promising high interest rates earned on third-party loans secured by real estate. In reality, the funds generated little income, and investors’ money funded Shapiro’s lavish lifestyle, said the SEC.
If you or someone you know suffered losses while investing with Christopher Todd Wendel, call Marquardt Law Office LLC at (312) 945-6065 for a free consultation.
Marquardt Law Office LLC is a securities law firm that represents clients nationwide to recover losses from misconduct such as fraud and negligence. Most cases are handled on a contingency fee basis, meaning there will not be an attorney fee if there is no recovery.
