Geoffrey Michael Wolterstorff (also known as Geoff Wolterstorff), a stockbroker based in Eau Claire, Wisconsin, and associated with Lifemark Securities Corp., has been sanctioned by the United States Securities and Exchange Commission (SEC). In the Matter of Geoffrey Wolterstorff, Administrative Proceeding File No. 3-21983 (July 29, 2024).
According to the Order, between 2020 and 2022, the broker recommended high-risk GWG Holdings Class L Bonds to retail investors without fully understanding the product himself. He failed to review critical financial disclosures about the issuing company, which had a history of operating losses and relied heavily on selling debt to stay afloat. Even after the company disclosed significant financial weaknesses—such as doubts about its ability to continue operating—he continued selling the bonds without adjusting his recommendations. He incorrectly believed investors could redeem the bonds at any time for a fee, even though early redemption was only allowed in specific cases like death or bankruptcy.
One particular mistake involved selling a $50,000 GWG Holdings Class L Bond with a five-year term to a 63-year-old semi-retiree whose primary investment goal was preserving capital. The customer explicitly stated he could not afford to lose principal, yet the broker still pushed an investment that was speculative, illiquid, and at risk of default—ignoring both the customer’s needs and the company’s financial instability.
SEC found that Wolterstorff failed to comply with Regulation Best Interest’s Care Obligation, Exchange Act Rule 15l-1(a)(2)(ii), when recommending GWG Holdings Class L Bonds to retail customers without exercising reasonable diligence, care, and skill to understand the risks, rewards, and costs associated with his recommendations.
As a result, the SEC imposed a cease-and-desist order, censure, a six-month suspension from association with a broker, dealer, and investment adviser, and an additional six-month suspension from participating in any penny stock offering, effective August 12, 2024, through February 11, 2025. He was also ordered to pay $15,000 in civil and administrative penalties.
Wolterstorff has been associated with Lifemark Securities Corp. since October 1, 2018.
