Christopher Richard Wurtzinger of Chicago Illinois a stockbroker and supervisor formerly registered with Forest Securities has been suspended from associating with any Financial Industry Regulatory Authority (FINRA) member in any principal capacity based upon consenting to findings that Wurtzinger failed to supervise outside business activities relating to the sale of Woodbridge Group of Companies promissory notes. Letter of Acceptance Waiver and Consent No. 2018057522002 (June 18, 2020).
According to the AWC, when stockbroker JN became associated with Forest Securities, he relayed to Wurtzinger that he would be engaged in an outside business activity involving a first position commercial mortgage program. JN indicated to Wurtzinger that he would be engaged in the introduction and sales of this program and that the program was sponsored by Woodbridge Group of Companies. JN’s request was authorized by Wurtzinger.
The AWC stated that in December of 2016 and December of 2017, outside business activity documentation had been submitted by JN which reflected that he wished to renew his approval to facilitate the sales of the first position commercial mortgage program sponsored by Woodbridge. JN told Wurtzinger that he recently earned compensation in regard to this outside activity. Wurtzinger authorized Wurtzinger’s requests.
FINRA revealed that $3,365,000.00 in first position commercial mortgage notes were sold by JN away from Forest Securities. The Woodbridge products were sold to at least two customers of Forest Securities and sixteen additional investors.
FINRA revealed that the first position commercial mortgage promissory notes contained twelve month durations and had generally paid nine percent which was allocated between the investor and the representative. Funds from the notes had been pooled together to finance a third party commercial borrower for the purchase and renovation of real estate. The AWC pointed out that those borrowers were actually Woodbridge affiliates – not third party commercial borrowers. On December 4, 2017, a chapter 11 bankruptcy petition had been filed by Woodbridge. On December 20, 2017, a complaint was filed by Securities and Exchange Commission against Woodbridge and Robert Shapiro alleging their execution of a Ponzi scheme.
FINRA determined that Wurtzinger did not perform an adequate analysis into JN’s outside business activity to determine if it was accurately labeled as an outside business activity. The regulator indicated that JN’s disclosures should have alerted Wurtzinger to JN’s activities possibly constituting private securities transactions. Wurtzinger could have also reviewed regulatory actions relating to Woodbridge which would have revealed that the notes would be pooled. Forest Securities even denied another stockbroker’s request to effect the first position commercial mortgage notes sales as an outside busines activity. FINRA indicated that Wurtzinger also failed to document his analysis of JN’s request prior to approving it. Wurtzinger’s conduct was violative of FINRA Rules 3270 and 2010.
This is not the first time that Wurtzinger has been sanctioned by a securities regulator. He was fined $5,000.00 by the State of Illinois based upon allegations that he neglected to see that his subordinate stockbroker made required regulatory disclosures during the time that Wurtzinger was Chief Compliance Officer of Traderight Securities Inc.
Wurtzinger has also been identified in a customer initiated investment related arbitration claim where the customer sought damages estimated to exceed $5,000.00 in damages founded on accusations that the customer was defrauded. FINRA Arbitration No. 17-02211 (Aug. 23, 2017). According to the claim, a fiduciary duty that was owed to the customer was breached. The claim alleges that unauthorized stock and corporate debt trades were executed in the customer’s account. The customer’s account was allegedly churned between 2012 and 2016.
Wurtzinger’s registration with Forest Securities has been terminated as of December 31, 2019. He is currently associated with American Trust Investment Services and Sorsby Financial Corp.
