Christopher Wendel (Wendel), a registered representative, settled a complaint with the Financial Industry Regulatory Authority (FINRA), which alleged he participated in outside business activities. Specifically, FINRA alleged Wendel solicited four customers to investment in Woodbridge Mortgage Investment Funds (“Woodridge Promissory Notes”) without notice to his firm. Based upon these allegations, FINRA barred Wendel from the financial industry.
Wendel (FINRA CRD No. 1930870) was registered as a general securities representative since 1989. From 2014 to 2017, Wendel worked for SA Stone Wealth Management Inc. (“SA Stone”). According to Wendel’s FINRA BrokerCheck report, he has nine negative disclosures, including six customer complaints. SA Stone terminated Wendel in September 2017 due to selling away.
FINRA requires employees of FINRA-member firms to disclose all outside business-related activities, private transactions and all investments recommended to any customers to the member firm. The unlawful business practice of recommending investments outside of a financial advisor’s firm is often referred to as “selling away.” Outside business transactions and selling away are prohibited activities because they serve to undercut the supervisory system implemented by FINRA-member firms and FINRA itself to protect the investing public.
FINRA’s Department of Enforcement investigated Wendel and alleged he solicited four customers to invest $343,500 collectively in Woodridge Promissory Notes. According to FINRA, Wendel did not disclose these transactions to SA Stone and did not receive prior approval. FINRA alleged Wendel also violated FINRA Rules 8210 and 2010 by providing a false written response and false on-the-record testimony concerning the private securities transactions.
Based upon the foregoing misconduct, FINRA alleges Wendel violated FINRA Rules 2010 and 3280, among others. For example, FINRA 3280 prohibits registered representatives from “participating in any manner in a private securities transaction” unless the registered representative provides written notice to the member, and where he is to receive selling compensation, the member has approved his participation in the proposed transaction. Here, Wendel did not disclose his participation in recommending Woodridge Promissory Notes to the four customers, and therefore, violated FINRA rules.
Lufrano Law, LLC is a national investment litigation firm and has experience representing investors who have investment disputes with brokers and broker-dealers. Please contact us at (800) 627-2179 for more information if you have been the victim of investment negligence or fraud.