The White Law Group reviews the regulatory history of Woodbury Financial Services.
Woodbury Financial Services (CRD#: 421/SEC#: 801-54905,8-13846), an Advisor Group firm, has been a FINRA broker-dealer since 1968. The firm, located in Oakdale, Minnesota, is one of eight brokerage firms that will rebrand as “Osaic Wealth” this year.
The firm currently has 33 disclosures on its CRD or FINRA BrokerCheck report, including 23 regulatory events and 9 arbitrations.
Regulatory actions taken against a broker-dealer may include censures, fines, suspensions and restitution, among others. They can have serious consequences for a broker-dealer’s profile and reputation. The following is a review of Woodbury Financial Services including complaints, broker misconduct and FINRA claims.
Customer Complaints and Broker Misconduct
All broker-dealers have a responsibility to adequately supervise its employees. They must ensure the necessary procedures and systems to detect misconduct. There have been several cases of registered representatives employed by Woodbury Financial Services who were allegedly involved in broker misconduct and fraudulent activities. When brokers violate securities laws, such as making unsuitable investments, the brokerage firm they are working with may be liable for investment losses through FINRA Arbitration.
August 2022 – Former Woodbury broker, Ronald Hannes was reportedly indicted on $2.9 million fraud allegations. Hannes allegedly recruited at least 21 investors to put money into high-yield bonds, but instead purportedly deposited that money in personal accounts. Hannes’ reportedly pleaded not guilty to all charges to a federal judge, according to the article. Between July 2017 and November 2019, Hannes while registered as a broker with Woodbury Financial Services, allegedly provided fake investment account statements to his alleged victims in an effort to get them to reinvest. In February 2020 FINRA reportedly barred him from working in the securities industry. See: Broker Ronald Hannes Accused of Selling Fictitious Investments
September 2019 – A former Woodbury broker located in Germantown Tennessee was barred after a customer alleged that he “utilized her funds for his own use and benefit.” Criminal charges were then filed in March 2020 against the broker for allegedly using a Power of Attorney to steal and embezzle funds from the client more than $1.3 million, for his own personal benefit. Stephen Douglas Fry (Steve Fry), Financial Advisor Fraud Investigation
March 2019 – The SEC barred Former Woodbury broker Kevin Wanner while reportedly serving 11 years in prison for his role in perpetrating a 15-year Ponzi scheme that defrauded multiple investors out of more than $3 million. Wanner’s alleged scheme swindled 66 North Dakotans by selling fictitious brokered certificates of deposit and unregistered interests in pooled investments. Wanner was purportedly keeping the money, in classic Ponzi-scheme style, allegedly using money from one investor to pay interest to the next to keep the scheme going. He purportedly provided false information and counterfeit documents, including fake account statements and tax documents, to make the investments appear legitimate. In 2018, Woodbury agreed to pay nearly $600,000 to people who were victimized while Wanner worked there as a FINRA registered securities agent.
FINRA Claims: Woodbury Financial Services Lawsuits
June 2018 – a FINRA panel ordered Woodbury Financial Services to pay 2 customers $1.1 million for allegedly failing to supervise a former broker’s unsuitable transactions. Woodbury Financial Services reportedly paid $970,107.21 in compensatory damages and $121,468 in interest to two investors as a result of the firm’s failure to supervise former broker, Robert Hayes Hoffman. The claimants alleged that Woodbury breached its fiduciary duty, was negligent and engaged in fraud and deceit in connection with selling them investments in several companies, variable annuities and A-share mutual funds.
According to his FINRA BrokerCheck report, Hoffmann was registered with Woodbury in Greenwood, Indiana from 2008 to 2017. According to his CRD, Hoffman has nine disclosures on his record. He was barred in November 2017 “…in connection with an investigation into allegations by a customer concerning, among other things, potential unsuitable recommendations, unauthorized transactions, excessive trading, and private securities transactions.” Woodbury Financial Clients awarded $1.1 million
FINRA Censures and Fine Woodbury Financial Services
July 2019 – Woodbury Financial Services agreed to the sanctions of a censure and fine of $225,000 for allegations that its system for supervising additions to existing variable annuities was not reasonably designed to achieve compliance with securities laws and FINRA rules, including suitability rules. FINRA’s findings stated that the firm did not use surveillance tools to provide the firm with information about potentially unsuitable transactions. Woodbury Financial Services, Inc. Censured & Fined
July 2018 – FINRA sanctioned four firms, Royal Alliance Associates, Inc., FSC Securities Corporation, SagePoint Financial, Inc., Woodbury Financial Services, Inc. for failure to establish, maintain and enforce a supervisory system in connection with variable annuities. The firms reportedly failed to provide training to their representatives and principals on the sale and supervision of multi-share class variable annuities. Woodbury was censured and fined $250,000.
January 2012 – FINRA Sanctioned Woodbury with a censure and fine of $75,000 after one of its representatives allegedly converted close to $1 million from the firm’s customers, through wire transfers. The findings stated that the firm’s supervisory control system in this area failed to include a policy or procedure requiring a review to detect or prevent multiple wires, from one or numerous customers, going to the same third-party account. FINRA Fines Woodbury Financial Services, Inc.
May 2012 – FINRA censured and fined Woodbury Financial Services, Inc. $45,000 for allegedly failing to establish, maintain and enforce an adequate system to review equity trades for excessive trading. Excessive trading, often called quantitative suitability, generally relates to any time a financial advisor’s trading strategy can clearly only benefit the advisor through the form of commissions and cannot be justified as a legitimate trading strategy. Woodbury Financial Services, Inc. fined by FINRA
All broker-dealers have a responsibility to adequately supervise their advisors. They must ensure they have procedures and systems in place to detect broker misconduct. 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.
When brokers violate securities laws, such as making unsuitable investments, the brokerage firm they are working with may be liable for investment losses through FINRA Arbitration.
The Financial Industry Regulatory Authority (FINRA) operates the largest dispute resolution forum in the securities industry. In fact, FINRA Dispute Resolution is the forum for almost all disputes between investors, brokerage firms and individual brokers. This is mainly because the vast majority of brokerage firms have mandatory arbitration clauses in their account agreements that require investors to file their disputes through FINRA.
The White Law Group represents investors in FINRA claims against their broker dealers. If you have suffered losses due to broker negligence or broker fraud, we can help. Our firm can evaluate the strength of your case, draft a well-structured statement of claim that accurately presents your allegations of fraud and desired damages, and provide representation during the arbitration hearing by presenting evidence and making compelling arguments on your behalf. Additionally, an attorney can engage in negotiation efforts for a potential settlement before the arbitration process begins. Opting for our securities attorneys will ensure that your rights are safeguarded throughout the arbitration process, maximizing your likelihood of achieving a favorable resolution.
If you have suffered losses with Woodbury Financial Services, the securities fraud attorneys at the White Law Group may be able to help you. For a free consultation, please call the offices at 888-637-5510.
The foregoing information, which is all publicly available, is being provided by The White Law Group. The White Law Group is a national securities arbitration, securities fraud, and investor protection law firm with offices in Chicago, Illinois and Seattle, Washington.
For more information on The White Law Group, visit whitesecuritieslaw.com.
Tags: broker-dealer review, Woodbury Financial Services Last modified: August 25, 2023