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Fred Randhahn: Sigma Broker Suspended Over Woodbridge Notes
Former Ogden, Utah-based broker and investment adviser Fred Randhahn (CRD# 1338801) was recently sanctioned by the Financial Industry Regulatory Authority in connection to allegations he improperly engaged in private securities transactions involving the Woodbridge Group of Companies. Formerly registered with Sigma Financial Corporation, Randhahn was issued a nine-month suspension and a fine of $5,000.
According to a Letter of Acceptance, Waiver and Consent (No. 2018059663501) dated November 2019, Fred Randhahn was associated with Sigma Financial Corporation as a General Securities Representative from January 2012 until August 2018, when the firm discharged him in connection to its belief that he sold customers unapproved investments. FINRA’s findings go on to state that between June 2016 and September 2017, he solicited investors to make purchases of promissory notes connected to “a purported real-estate investment fund” known as the Woodbridge Group of Companies. He allegedly sold five investors a total of $625,000 in promissory notes relating to the Woodbridge Group of Companies, according to FINRA, and two of these investors were Sigma Financial customers. FINRA states further that he made personal investments of $125,000 in the promissory notes, and that he received commissions totaling $33,167.67 connected to the transactions in question.
FINRA states that Sigma Financial Corporation’s written supervisory procedures at the time required its registered representatives to seek and receive firm approval in advance of participation in private securities transactions, however, Randhahn did not do so in connection to the Woodbridge promissory notes. He also allegedly did not disclose his activities connected to the Woodbridge notes in two firm questionnaires, and instead “denied participating in any private securities transactions or selling any non-securities investment products.” FINRA finally notes that the Woodbridge Group of Companies filed for Chapter 11 bankruptcy on December 27, and in December 2018 a federal court issued judgments against the company and its former owners, requiring them to disgorge “ill-gotten gains.” FINRA states that the foregoing conduct by Rahdhahn constituted violations of FINRA Rules 3280 and 2010. He was issued a nine-month suspension from association with any FINRA member firm, and was ordered to pay a fine of $5,000.
Fred Randhahn is currently not registered with any FINRA member firm. His previous registrations include Sigma Financial Corporation, Ameriprise Financial Services, Ameriprise Advisor Services, Merrill Lynch, FIS Securities, Cigna Financial Advisors, and Pruco Securities Corporation. He has passed four securities industry qualifying examinations and his BrokerCheck report currently lists no state securities licenses. (Information current as of May 6, 2020.)