Erez Law is currently investigating former Sigma Financial Corporation broker Frederick Randhahn (CRD# 1338801) regarding Woodbridge Group of Companies, LLC investment losses. Randhahn was registered with Sigma Financial Corporation in Ogden, Utah from 2012 to August 2018, when he was terminated regarding, “Firm has reason to believe the representative sold unapproved investments to customers.”
In November 2019, FINRA suspended Randhahn for nine months and sanctioned him to a $5,000 civil and administrative penalty and fine as well as $33,167.67 in disgorgement. According to FINRA, Randhahn consented to the sanctions and to the entry of findings that he engaged in private securities transactions involving the sale of promissory notes in Woodbridge Group of Companies, LLC without seeking prior approval from his member firm. The FINRA findings stated that Randhahn solicited investors to purchase promissory notes relating to Woodbridge Group of Companies, a purported real-estate investment fund. FINRA found that Randhahn sold $625,000 in the promissory notes to investors, two of whom were also customers of his firm, and Randhahn personally invested $125,000 in promissory notes and received $33,167.67 in commissions in connection with these transactions.
The Woodbridge Group of Companies was a southern California luxury real estate developer who operated a $1 million Ponzi scheme. It is alleged that unregistered brokers sold unregistered securities in the purchase and sale of securities. The company missed payments on notes sold to investors in December 2017, along with 281 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 $150 Million in DIP financing from an investor, Hankey Capital.
It is alleged that investors were promised as high as 10% commissions on investments in the Woodbridge Group of Companies. It is also alleged that Robert Shapiro, the former CEO of Woodbridge Group of Companies, used money from new investors to repay earlier ones and stole as much as $95 million, routing money through a network of 270 limited liability companies he controlled.
According to the statement by the Department of Justice of the U.S. Attorney’s Office of the Southern District of Florida, at least 2,600 of these investor victims invested their retirement savings, totaling approximately $400 million.
In April 2019, the SEC charged the Woodbridge Group of Companies execs with criminal fraud.
Randhahn has been the subject of one customer complaint, according to his CRD report:
October 2018. “Statement of claim alleges the client was sold unapproved investments in 2016 and 2017. Claim further alleges that these investments were high risk and fraudulent.” The customer is seeking $400,000 in damages and the case is currently pending.
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, Sigma Financial Corporation may be liable for investment or other losses suffered by Randhahn’s customers.
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If and have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.
Did You Lose Money Investing with Robert Vance?
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If you have experienced investment losses, please call us at 888-840-1571 or complete our contact form below for a free consultation.
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