Securities Lawyers Blog
According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisor Christopher Wendel (Wendel), in September 2017, was terminated by his firm, SA Stone Wealth Management Inc. (SA Stone Wealth) based on allegations that Wendel violated the firm’s policy on selling away. In addition, Wendel has five customer complaints on his record. The latest customer complaint occurred in May 2013 and alleged that the customer was sold in unsuitable REITs. The claim alleged $171,000 in damages and was settled.
At this time it is unclear the extent and scope of Wendel’s private securities activities. Wendel’s CRD lists that he is engaged in an outside business activity called Smoke on the Water LLC.
The providing of loans or selling of notes and other investments outside of a brokerage firm constitutes impermissible private securities transactions – a practice known in the industry as “selling away”.
In the industry the term selling away refers to when a financial advisor solicits investments in companies, promissory notes, or other securities that are not pre-approved by the broker’s affiliated firm. However, even though when these incidents occur the brokerage firm claims ignorance of their advisor’s activities the firm is obligated under the FINRA rules to properly monitor and supervise its employees in order to detect and prevent brokers from offering investments in this fashion. In order to properly supervise their brokers each firm is required to have procedures in order to monitor the activities of each advisor’s activities and interaction with the public. Selling away misconduct often occurs where brokerage firms either fail to put in place a reasonable supervisory system or fail to actually implement that system. Supervisory failures allow brokers to engage in unsupervised misconduct that can include all manner improper conduct including selling away.
In cases of selling away the investor is unaware that the advisor’s investments are improper. In many of these cases the investor will not learn that the broker’s activities were wrongful until after the investment scheme is publicized, the broker is fired or charged by law enforcement, or stops returning client calls altogether.
Parr entered the securities industry in 1989. From September 2002 until September 2014 Wendel was associated with WRP Investments, Inc. From September 2014 until September 2017 Wendel was associated with SA Stone Wealth out of the firm’s Celina, Ohio office location.
Investors who have suffered losses may be able recover their losses through securities arbitration. The attorneys at Gana Weinstein LLP are experienced in representing investors in cases of selling away and brokerage firms failure to supervise their representatives. Our consultations are free of charge and the firm is only compensated if you recover.