Jeffrey Scott Nimmow of Hillside Illinois a stockbroker formerly registered with Forest Securities Inc. has been barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon findings that (1) Nimmow sold at least $3,000,000.00 worth of Woodbridge Group of Companies promissory notes to investors without the securities broker dealer’s approval and outside of its auspices and (2) Nimmow lacked registration which was necessary to effect promissory notes sales. Letter of Acceptance Waiver and Consent No. 2018057522001 (Feb. 10, 2020).
According to the AWC, in 2013, Nimmow discovered purported real-estate investment fund, Woodbridge Group of Companies LLC. By 2015, Nimmow’s prior securities broker dealer, Questar Capital Corporation, was approached by Nimmow and asked if he could facilitate purchases of Woodbridge Group of Companies LLC First Position Commercial Mortgage Notes. The AWC stated that funds Woodbridge obtained through these notes, which contained twelve month durations and paid nine percent interest, were applied towards a third party borrower who bought and renovated commercial real estate. Questar had no plans to honor the stockbroker’s request.
In 2015, when Nimmow became associated with Forest Securities Inc., he asked if he could engage in an outside business activity involving the sale of Woodbridge First Position Commercial Mortgage Notes. At that time, Nimmow failed to report the details of his involvement in the transactions or that the notes were in all likelihood securities. Nimmow subsequently sold the Woodbridge First Position Commercial Mortgage Notes to investors without reporting these private securities transactions to Forest Securities. Also, FINRA noted that Nimmow lacked registration or qualifications to effect promissory notes sales as they were unregistered securities. The stockbroker violated FINRA Rules 2010, 3280 and National Association of Securities Dealers (NASD) Rule 1031 in this regard.
The AWC stated that in sum, $3,365,000.00 worth of First Position Commercial Mortgage Notes were sold by Nimmow to two of his Forest Securities customers and sixteen additional investors between February of 2016 and November of 2017. The stockbroker accumulated commissions of $177,937.00 through his sales efforts. FINRA noted that a Chapter 11 bankruptcy petition had been filed by Woodbridge in December of 2017.
Woodbridge was subsequently charged by Securities and Exchange Commission (SEC) in a Complaint containing allegations that Woodbridge and prior owner, Robert Shapiro, ran a Ponzi scheme. A judgement was subsequently entered against Shapiro which enjoined him from committing future federal securities laws violations and mandated his disgorgement of $18,546,643.00 in illicit gains and payment of a $120,710,256.69 fine. Securities and Exchange Commission v. Robert H. Shapiro et al. (S.D. Fla. 17-24624-MGC (Dec. 27, 2018).
FINRA Public Disclosure confirms that Nimmow has been identified in four customer initiated investment related disputes concerning accusations of his misconduct during the time that the stockbroker was employed by Forest Securities. In particular, a customer filed an investment related complaint concerning Nimmow’s activities where the customer sought $450,000.00 in damages founded on accusations of the customer sustaining losses from First Position Commercial Mortgage Notes sold by Nimmow between 2015 and 2017 through Legacy Financial Network and Retirement Services, an entity which the stockbroker owned. Civil Action No. 2018cv000188 (June 5, 2018).
Nimmow has been referenced in another customer initiated investment related arbitration claim which was resolved for $53,500.00 in damages supported by allegations that the customer was provided unsuitable advice which led to the customer loaning funds to Woodbridge Group of Companies Fund II in 2017. FINRA Arbitration No. 18-02037 (Aug. 22, 2019). Also, a customer initiated investment related arbitration claim involving Nimmow’s conduct was settled for $55,000.00 in damages based upon allegations of unwarranted losses stemming from the stockbroker’s unlawful or inappropriate sales of Woodbridge Group of Companies Fund III to the customer. FINRA Arbitration No. 18-02242 (June 16, 2018).
Nimmow was discharged by Forest Securities on March 6, 2018 based upon allegations of the stockbroker selling away in regard to Woodbridge promissory notes.
