Former SA Stone Wealth Management Inc. financial advisor Christopher Wendel (CRD# 1930870) is alleged to be involved in the $1.22 billion Woodbridge Group of Companies Ponzi Scheme. Wendel was registered with SA Stone Wealth Management Inc. in Celina, Ohio from 2014 to September 2017, when he was terminated regarding, “Violated firm policy regarding selling away.” SA Stone Wealth Management Inc. opened an investigation into Wendel in April 2017 for the sale of non-approved products. Previously, he was registered with WRP Investments, Inc. in Celina, Ohio from 2002 to 2014.
In June 2018, FINRA barred Wendel after he consented to the sanction and to the entry of findings that he engaged in private securities transactions without providing notice to SA Stone Wealth Management Inc. prior to participating in these transactions, nor did he obtain approval from the firm. FINRA found that Wendel solicited investors to purchase promissory notes in Woodbridge Mortgage Investment Funds, a purported real-estate investment fund.
It is alleged that “Wendel sold $343,500 in Woodbridge promissory notes to individuals, and he received more than $10,000 in commissions in connection with these transactions. The findings also stated that in response to a request for information, issued by FINRA, Wendel provided a signed declaration falsely stating that his participation in the sale of a Woodbridge promissory note occurred after his association with the firm ceased. Later, during Wendel’s on-the-record testimony, he provided false testimony to the same effect.”
It is reported that Wendel allegedly sold investments in the $1.22 billion Woodbridge Ponzi Scheme involving the Woodbridge Group of Companies. The company missed payments on notes sold to investors and filed chapter 11 bankruptcy in December 2017, along with 275 subsidiaries and affiliates, citing “unforeseen costs associated with ongoing litigation and regulatory compliance.” The company has $750 million in debt and has a commitment of $100 million in DIP financing from an investor, Hankey Capital. Then on December 20, 2017, the Securities & Exchange Commission (SEC) requested Injunctive Relief against the Woodbridge Group of Companies, former principal Robert Shapiro, and LLCs tied to the scheme.
Wendel has been the subject of five customer complaints between 2000 and 2013, one of which was denied and one was closed without action, according to his CRD report:
- February 2018. “Unsuitable investment recommendation and failure to supervise.” The customer is seeking $150,000 om damages and the case is currently pending.
- May 2013. “Client alleges that Wendel invested a large portion of the client’s assets into REITS that are considered illiquid and that Wendel sold low cost mutual funds to purchase higher cost mutual funds. Client alleges that these investments were unsuitable for him based on his objectives.” The customer sought $171,000 in damages and the case was settled for $90,000.
- July 2003. “Client’s lawyer has written claiming losses due to unsuitable investments.” The client sought $49,107 in damages and the case was settled for $200,000.
- April 2000. “The client alleged I conducted unauthorized trading, signed or offered to sign the client’s signature, convert her stock holdings from type “A” to type “B” mutual fund shares to her disadvantage and invested in annuities against her wishes during the period of February and march. Though not identified by the client, damages are estimated to exceed $5,000.” The case was settled for $130,936.88.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, SA Stone Wealth Management Inc. may be liable for investment or other losses suffered by Wendel’s customers.
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