Scott Wolfrum

Date:

May 10, 2021

Type of alert:

SEC Cease-and-Desist  

On March 24, 2021, the Securities and Exchange Commission (SEC) filed cease-and-desist proceedings against investment adviser Scott Wolfrum of Indianapolis, Indiana for failing to disclose conflicts of interest when making investment recommendations to clients from December 2015 to June 2018.

During this time, Wolfrum was associated with two broker dealers in Indianapolis that are registered with the SEC and FINRA. Wolfrum was associated with David A. Noyes & Company from May 2013 to January 2018 and Huntleigh Securities Corporation from January 2018 to September 2019.

During this time period, Wolfrum provided investment advice to clients under Wolfrum Capital Management, an unregistered investment adviser that he solely owned, and through these registered firms. In February 2018, Wolfrum became 50% owner of Foundry Capital Group (FCG), and by July 2018, Wolfrum became 100% owner of FCG.

According to the SEC Order, Wolfrum sold over $20 million in interests in Foundry Mezzanine Opportunity Fund (FMOF), a private fund that provides lending to and invests in small businesses, without disclosing to these investors that FCG is the general partner for FMOF. Wolfrum also failed to disclose that he and his family had 7.5% equity interest in two of FMOF’s holdings and that he received $140,125 in finder’s fees for facilitating two FMOF investments.

As a result of the foregoing, Wolfrum violated Section 206(2) of the Advisers Act, which prohibits investment advisers from engaging “in any transaction, practice, or course of business which operates as a fraud or deceit upon any client or prospective client.” Anticipating the SEC Order, Wolfrum presented an Offer of Settlement and agreed to cease-and-desist from further violations of relevant securities laws, a bar from serving as a broker, dealer, investment adviser, or other position directly related to the securities industry. The SEC also ordered Wolfrum to pay disgorgement of $140,125, prejudgment interest of $21,354, and $75,000 in civil penalties to the SEC.

Take the next steps to find out if you have a claim:

Step 1.

Talk to an Experienced Attorney Today

Call and speak to one of our attorneys* for a no-cost consultation to discuss your situation, answer your questions, and help you determine the next steps. This call usually takes about 15 minutes, but we are happy to talk to you as long as you would like!

Step 2.

Quick Review of Your Paperwork

If we think you might have a case, we will need to review a few basic documents. If we determine you have a case, then you will have the option to hire us as your attorneys to pursue it.

Step 3.

Signed Attorney/Client Agreement

If you decide to hire us to pursue your case, we will have you sign an attorney-client agreement so we can begin the process of trying to recover your losses.*

*In the vast majority of cases, our agreement is contingent – meaning you won’t owe us any money unless we recover money for you.


Request a Consultation

This site contains attorney advertising. The attorneys at ChapmanAlbin are licensed to practice law in Ohio and Michigan. Any reference to past cases or successes made herein should not be construed as a guarantee of any future outcome. Each client and each client’s case is unique, and no result or outcome is or can ever be guaranteed. The information provided in this website is offered for general information purposes only; it is not offered as and does not constitute legal advice in any way. // Disclaimer