FINRA Bars Former Quest Capital Broker for Selling Woodbridge Promissory Notes
The Financial Industry Regulatory Authority has barred former Quest Capital broker Frank Dietrich for selling his clients more than $10.8 million in promissory notes in Woodbridge Group of Companies Inc., which filed for bankruptcy in December 2017.
The Financial Industry Regulatory Authority has barred former Quest Capital broker Frank Dietrich for selling his clients more than $10.8 million in promissory notes in Woodbridge Group of Companies Inc., which filed for bankruptcy in December 2017. Dietrich consented to the bar without admitting or denying the allegations.
Last year, Woodbridge and its CEO Robert Shapiro were charged by the SEC with running a $1.2 billion Ponzi scheme. Shapiro recently agreed to pay $120 million to settle fraud charges in the alleged scheme, without admitting or denying the charges.
FINRA claims that between 2013 and 2017, Dietrich engaged in the private securities transactions without notifying Quest or obtaining the broker-dealer’s approval, a violation of FINRA rules. He raised more than $10.8 million from 58 investors, 30 of whom were Quest customers, and received approximately $260,900 in commissions from the transactions, the regulator said.
Shapiro and Woodbridge allegedly paid $64.5 million in commissions to sales agents who pitched the investments as “low risk” and “conservative,” according to the SEC complaint. A number of brokers who sold the Woodbridge notes were previously charged by the SEC or barred by FINRA.
According to his Brokercheck profile, Dietrich was allowed to resign from Quest in March 2018 for failing to disclose his outside business activities and selling an unapproved product. Additionally, there are a multiple pending arbitration claims against him over the Woodbridge note sales, with clients requesting damages ranging from $5000 to $633,880.
Prior to his bar, Dietrich held FINRA Series 6, 7, 26, 63, 65 licenses.
