$121,745.56 Arbitration Award on Behalf of Victims of the $1.2 Billion Woodbridge Mortgage Investment Fund Ponzi Scheme
Forest Securities, Inc., Loses Second Woodbridge Case to Go to a Final Hearing
Milwaukee, Wisconsin, Arbitration Panel Finds That Broker-Dealer Violated the Securities and Exchange Act of 1934 and the Wisconsin Uniform Securities Law by Failing to Reasonably Supervise a Financial Advisor Working From His Home
ST. PETERSBURG, Fla., Nov. 21, 2019 (GLOBE NEWSWIRE) -- Goodman & Nekvasil, P.A., announces they have won a $121,745.56 FINRA arbitration award against Forest Securities, Inc. (“Forest”), a Chicago, Illinois, broker-dealer, on behalf of James A. Stoffels, Dorene G. Stoffels and Donna J. Hosking, residents of Sauk City, Wisconsin. The award includes $10,000 in sanctions and attorneys’ fees totaling $34,698.73.
James A. Stoffels is a 76 year old retiree with only a high school education, who worked as a laborer for the Oscar Meyer Company for 33 years. His wife, Dorene Stoffels, is 77 years old, also has only a high school education, and worked on an assembly line for Graber Mfg. for 23 years. Donna Hosking is 77 years old, with only a high school education, and worked as a healthcare assistant for 30 years.
Jeffrey S. Nimmow, a licensed financial advisor with Forest, worked from his home in Merrimac, Wisconsin. In February 2017, and August 2017, respectively, Nimmow recommended that the Stoffels invest $80,000 and Hosking invest $70,000 in Woodbridge Mortgage Investment Fund 3, LLC (“Woodbridge”). Woodbridge was a fraudulent $1.2 billion Ponzi scheme that ultimately went bankrupt only months later, namely, in December 2017.
The Panel found that Forest violated the federal and state securities statutes by failing to reasonably supervise Nimmow. Forest never inspected Nimmow’s office and, in fact, Nimmow never even met any Forest employees in person in his two and half years of employment with the firm. The Panel also found that “Forest failed to recognize numerous red flags about Nimmow’s conduct.” These red flags included a request by Nimmow to sell Woodbridge and Nimmow’s disclosure of his involvement with Woodbridge on compliance forms.
“This is the second case involving the Woodbridge fraud to go to a final arbitration hearing,” says Kalju Nekvasil, Esq., of Goodman & Nekvasil, P.A., the St. Petersburg, Florida, law firm representing the Stoffels and Hosking and the investor in an earlier Woodbridge case. “Arbitration panels found in favor of the investors in both cases, which shows that panels are willing to hold broker-dealers responsible for lax supervision of sales agents who sell fraudulent investments,” says Nekvasil.Back to Recent Cases