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Articles Posted in Woodbridge

Ex-Forest Securities Broker Is Barred By FINRA 

Please contact our broker fraud lawyers at Sheperd Smith Edwards and Kantas (SSEK Law Firm) if former Forest Securities stockbroker, Jeffery Scott Nimmow, sold you Woodbridge promissory notes. 

Nimmow was recently barred by the Financial Industry Regulatory Authority (FINRA) after he sold over $3M in promissory notes from the Woodbridge Group of Companies to 18 investors. Woodbridge is accused of operating a $1.2B Ponzi scam that defrauded 8400 investors. Many of whom were retail investors that included seniors and retirees who lost their retirement money in the scam. 

Frederick Randhahn, a former Sigma Financial Corporation broker, is suspended by the Financial Industry Regulation Authority (FINRA) for nine months after he allegedly sold $625K of Woodbridge promissory notes to investors without the brokerage firm’s permission and approval to sell these products. 

In a letter of acceptance, waiver and consent, Randhahn agreed to pay a $5K fine and disgorge the almost $32K in commissions plus interest that he made from the sales. However, he did not admit to or deny the self-regulatory authority’s (SRO) findings. 

Randhahn Fired For Selling Unapproved Investments

It wasn’t bad enough that over 10,000 investors, many of them retirees and other retail investors, were bilked in the $1.2B Woodbridge Ponzi scam. Now, they are allowed to borrow against what they hope to recover after the bankrupt real estate developer’s assets are liquidated but they must pay a 16% interest rate to do so.

While the rate isn’t necessarily wrong or unfair on the part of hedge fund lender Axar Capital Management—it was the investors that went to the Delaware Bankruptcy court seeking a $215M loan facility so that they could access their funds until Woodbridge’s bankruptcy proceedings are settled—the rate is still a steep sum considering that they thought that their investments would garner an approximately 8% return.

SEC Goes After Woodbridge

Top10-3Five unregistered brokers and their companies are now facing US Securities and Exchange Commission charges accusing them of selling Woodbridge securities to investors even though they were not registered as broker-dealers and therefore were not allowed to sell these securities. The defendants allegedly made millions of dollars from the Woodbridge securities sales.

The unregistered brokers and their companies are Barry and Ferne Kornfeld and Fek Enterprises, Andrew G. Costa and Costa Financial Insurance Services Corp., Albert D. Klager and Atlantic Insurance & Financial Services Inc., and Lynette M. Robbins and Knowles Systems, Inc. They allegedly sold over $243M of Woodbridge unregistered securities to over 1600 retail investors.

According to the regulator’s complaints, the unregistered brokers and the companies marketed Woodbridge Group of Companies, LLC as an investment that was “safe and secure.” Woodbridge, however, declared bankruptcy last December. The moment Woodbridge filed for bankruptcy protection, investors stopped receiving the interest they were due each month and they still haven’t received a return on their principal.

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