As of November 26, the Financial Industry Regulatory Authority, Inc (FINRA) has barred Frank Dietrich from acting as a broker or associating with broker-dealer firms. Dietrich allegedly sold investors $10.8 million in promissory notes in an elaborate real estate Ponzi scheme.
According to the SEC lawsuit documents, Dietrich worked with the fraudulent Woodbridge Group of Companies, LLC who was soliciting disreputable investment brokers to sell promissory notes that they claimed were backed by mortgages. These notes were actually unregistered securities. Dietrich’s BrokerCheck record indicates he sold $10,831,645 in notes and received $260,864 in commissions from the transactions.
At the time these questionable dealings were taking place, Dietrich worked for Quest Capital Strategies, Inc., and took investments from his clients there. Quest terminated his employment in March of this year after receiving numerous customer complaints regarding the Ponzi scheme.
FINRA investigated two major claims from customer disputes regarding Dietrich’s activities. The first, that he failed to obtain approval from his firm, Quest, to provide his clients with private securities transactions. Second, that he did not provide notice to his member firm before engaging in the solicitation of its investors to purchase the private securities. Dietrich did not admit or deny the FINRA charges, and consented to the findings and the sanction.
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