Frank Dietrich (CRD#: 2506091, Lake Forest, California), who is a former Quest Capital Strategies securities broker, just got barred from the securities industry by the Financial Industry Regulatory Authority (“FINRA”) for engaging in private securities transactions, according to a Letter of Acceptance, Waiver and Consent #2018057197801 that was executed on November 26, 2018. Evidently, Dietrich consented to FINRA’s findings of his private securities transactions violating NASD Rule 3040 and FINRA Rules 3280 and 2010.
FINRA Rule 3280(b) requires associated persons to provide their employing FINRA-member brokerage firm with notification about any of their securities transactions to be executed outside their normal scope of employment. The firm has to be informed about the associated person’s involvement and possible compensation relating to the transactions, and has to approve of the transactions before they take place.
Dietrich apparently asked investors to purchase promissory notes that were tied to a supposed real estate investment fund, Woodbridge Group of Companies LLC. Apparently, those securities were not permitted by Quest Capital Strategies to be sold to its customers by Quest Capital Strategies brokers. FINRA said that Dietrich sold 58 investors the promissory notes for a total of $10,831,645.00. Critically, of the 58 investors, 30 had accounts at Quest Capital Strategies during this time. Dietrich was paid $260,864.00 for facilitating those notes sales to investors. Low and behold, Woodbridge filed for bankruptcy on December 4, 2017.
FINRA said that Dietrich never notified Quest Capital Strategies about his involvement in the promissory notes transactions pertaining to the Woodbridge Group of companies LLC. Furthermore, Quest Capital Strategies never approved Dietrich’s activities. Because of this, FINRA stated that Dietrich violated NASD Rule 3040 and FINRA Rules 3280 and 2010.
In addition to being barred by FINRA, Dietrich’s activities have been referenced in several customer disputes:
On May 25, 2018, an investor brought FINRA Arbitration #18-01059. The investor claimed to have purchased a Woodbridge Mortgage promissory note in August 2017 via Dietrich. However, this was done away from Quest Capital Strategies and without the firm’s permission or supervision. Because of the customer’s alleged losses incurred by the transaction, the customer demanded $100,001.00. This matter is pending a resolution.
An investor brought FINRA Arbitration #18-00793 on February 27, 2018. That customer also claimed to have purchased a Woodbridge promissory note from Dietrich. Dietrich apparently failed to execute the transaction in the scope of his employment at Quest Capital Strategies. The investor requested $633,880.00 in damages because of Dietrich’s conduct. The matter is still under review.
The Wunderlich Securities customer filed a complaint on February 18, 2013. Apparently, Dietrich serviced the customer’s account between 2011 and 2013. According to the customer, Dietrich (or someone under his control) potentially churned the customer’s equity account. Supposedly, Dietrich excessively traded in stock and equities in order to enrich himself without any regard for the customer’s financial interests. All things considered, on July 22, 2013, Wunderlich Securities settled the customer’s complaint for $14,000.00.
Dietrich worked for Capital Securities of America, Inc. (Hartville, Ohio) from 2002 to 2007, Wunderlich Securities, Inc. (Gainesville, Virginia) from 2007 to 2013; and Quest Capital Strategies (Lake Forest, California) from 2013 to 2018. Notably, Quest Capital Strategies terminated Dietrich because of his alleged outside business activities and private securities transactions.
If you suffered losses by investing with Frank Dietrich, call (888) 760-6552 for a free consultation with Soreide Law Group’s counsel. Our firm has recovered millions of dollars for investors who have been victim to broker and brokerage firm misconduct. We represent clients on a contingency fee basis and advance all costs.
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