Fredrick Martin Randhahn (also known as Frederick Martin Randhahn) of Ogden Utah a stockbroker formerly registered with Sigma Financial Corporation is the subject of a customer initiated investment related arbitration claim where the customer sought $100,000.00 in damages based upon accusations that the customer was placed into risky and fraudulent Woodbridge Mortgage Investment products during the time that Randhahn was associated with Sigma Financial Corporation. Financial Industry Regulatory Authority (FINRA) Arbitration No. 20-01056 (Apr. 15, 2020).
This is not the first time that Randhahn’s sales practices have been questioned by an investor. FINRA Public Disclosure reveals that a customer initiated investment related arbitration claim involving Randhahn’s conduct was settled for $175,000.00 in damages based upon allegations of the Sigma Planning Corporation customer being placed into unapproved investments by Randhahn between 2016 and 2017. FINRA Arbitration No. 18-03656 (Mar. 9, 2020). The claim alleges that the customer had been defrauded through purchasing a Woodbridge Mortgage Investment through the stockbroker.
Randhahn has been fined $5,000.00 and suspended from associating with any FINRA member in any capacity by consenting to findings that he engaged in undisclosed private securities transactions while employed by Sigma Financial Corporation. Letter of Acceptance Waiver and Consent No. 2018059663501 (Nov. 14, 2019).
According to the AWC, investors were solicited by Randhahn for Woodbridge Group of Company promissory notes which resulted in $625,00.00 in purchases by five investors. At least two customers of Sigma Financial Corporation had been sold notes by Randhahn. FINRA noted that in December of 2017, a chapter 11 bankruptcy petition had been filed by Woodbridge who along with its founder Robert Shapiro were subject of judgements requiring the payment of civil penalties and disgorgement of ill-gotten gains.
The AWC stated that Randhahn was specifically warned about the requirement to notify Sigma Financial Corporation about any promissory note transactions that he intended on engaging in irrespective of whether promissory notes were not deemed securities. Randhahn failed to communicate these transactions and also failed to be forthcoming on his 2016 and 2017 compliance questionnaires which called upon him to disclose this information. Randhahn falsely stated in those questionnaires that there were no private securities transactions that he involved himself with and that there were no non-securities investment products sold by him outside of the securities broker dealer’s auspices. FINRA found Randhahn’s conduct violative of FINRA Rules 2010 and 3280.
Randhahn was discharged by Sigma Financial Corporation on August 24, 2018 for selling away from the securities broker dealer.