Frederick Wesley Roehm, of Schaumburg, Illinois, a stockbroker formerly registered with FSC Securities Corporation, has been fined $5,000.00 and suspended from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity according to an Order Accepting Offer of Settlement containing findings that Roehm, inter alia, failed to disclose that a customer sued him for fraud. Department of Enforcement v. Frederick Wesley Roehm, Disciplinary Proceeding No. 2014041233001 (Oct. 30, 2017).
According to the Order, a married couple, RL and ML, contacted Roehm on October 17, 2013, demanding that payment be made to them according to an investment agreement that Roehm and the customers entered into. The customers reportedly submitted a draft complaint to Roehm, alleging that the agreement involved the customer’s $250,000.00 investment with EGSC, which was meant for raising capital for real estate consulting, marketing and financing. RL and ML reportedly asserted in the complaint to have been defrauded in relation to their investment with EGSC, never having received the funds that the investment agreement called for. Roehm was reportedly named as a defendant in the customer’s complaint.
Apparently, RL and ML alleged in their complaint that Roehm was liable for effecting unsuitable transactions in EGSC, breaching his fiduciary duties, and committing fraud in violation of state and federal law, where the customers alleged $225,000.00 in damages pertaining to lost investment funds and $1,235,000.00 in damages pertaining to lost investment returns. The Order revealed that Roehm neither updated FINRA nor his firm that he was subject of a customer initiated investment related written complaint alleging sales practice violations in which a customer sought damages. FINRA Department of Enforcement alleged Roehm’s failure to disclose the customer complaint to be conduct violative of FINRA Rules 2010 and 1122, as well as FINRA By-Laws Article V Section 2.
In addition, Roehm reportedly attempted to settle the customer’s complaint away from the firm, which failed and resulted in the customer pursuing civil litigation. Consequently, FINRA Department of Enforcement alleged that Roehm’s attempt to settle the customer’s complaint away from FSC Securities Corporation was conduct violative of FINRA Rule 2010.
FINRA Public Disclosure reveals that another customer filed an investment related civil action involving Roehm’s conduct, in which the customer requested $1,470,000.00 in damages based upon allegations including negligence, unsuitability, breach of fiduciary duty, and securities fraud regarding private placement investments. Civil Action No. 14-CV-01715 (Apr. 15, 2014).
On June 20, 2014, Roehm was fired from FSC Securities Corporation based upon allegations that he failed to timely disclose a customer dispute to the firm. Since August 19, 2014, Roehm has been associated with Ausdal Financial Partners, Inc.
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