Financial Advisor Scott Wolfrum Censured and Fined for Conflicts of Interest in Investment Recommendations
According to an administrative order on March 24, 2021, the Securities and Exchange Commission announced it has settled charges with broker Scott Wolfrum over allegations that Wolfrum failed to disclose conflicts of interest when recommending that his advisory clients invest in Foundry Mezzanine Opportunity Fund, a private fund that provides lending to and invests in small businesses.
From December 2015 to June 2018, Wolfrum reportedly sold more than $20 million in interests in the Foundry Mezzanine Opportunity Fund, almost all of which were recommended by Wolfrum and sold to his advisory clients. The SEC alleges that Wolfrum failed to disclose to his clients the conflicts of interest created by his and his family members’ financial interests in two of the Fund’s holdings and Wolfrum’s alleged receipt of $140,125 in finder’s fees for facilitating two different investments by the Fund.
According to the order, Wolfrum in addition to the cease and desist order and the censure, the SEC has ordered Wolfrum to pay disgorgement of $140,125 and prejudgment interest of $21,354 and a civil money penalty in the amount of $75,000 to the Securities and Exchange Commission.
Wolfrum’s broker profile indicates he was registered with David A. Noyes & Co. in Indianapolis, IN from May 2013 until January 2018. He then made a move to Huntleigh Securities Corp. where he reportedly worked until September 2019. He reportedly has three complaints filed against him, according to FINRA. Allegations include “unsuitable and concentration of annuities,” and “the purchase of a private placement was made without complainant’s approval,” among others.
Filing a Complaint against your Brokerage Firm
When brokers abuse client accounts and conduct transactions that violate securities laws, the brokerage firm they are working with may be liable for investment losses through FINRA Arbitration. Brokerage firms that fail to monitor the business activities of their employees may be liable for investment losses due to negligent supervision for the misconduct of their employees.
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Tags: broker investigation, scott wolfrum Last modified: July 21, 2023