THOMAS BODNAR LUNDGAARD Investment Fraud Investigation

March, 2025 | Based in Chandler, AZ

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What Investors Need to Know About Thomas B. Lundgaard

• Full Name: Thomas Bodnar Lundgaard
• CRD Number: 2820129
• Current Location: Chandler, Arizona
• Last Employer: Kestra Investment Services, LLC
• Registration Status: Not currently registered
• State Licenses: Previously held licenses in multiple states
• Experience: In the industry since 1996
• FINRA BrokerCheck: Disclosures include 1 customer dispute and 1 criminal charge
• Previous Employers: Kestra Investment Services (2016-2023), SII Investments (2009-2016), SagePoint Financial (2005-2009), SunAmerica Securities (1996-2005)
• Ability to Recover Losses: Potential for FINRA arbitration claims within eligibility timeframe

Detailed Case Overview: Understanding the Allegations Against Lundgaard

Thomas Bodnar Lundgaard, a financial advisor formerly registered with Kestra Investment Services in Chandler, Arizona, is currently under investigation for alleged misconduct related to client documentation and trust management. According to FINRA BrokerCheck reports, Lundgaard faces serious allegations regarding his handling of client accounts, specifically failing to obtain required documentation for trust accounts.

The most concerning disclosure in Lundgaard’s record involves a civil litigation filed in May 2022 in the District Court of Cleveland County, Oklahoma (Case #CJ-2022-368). The claimant alleged that Lundgaard “failed to obtained required documentation for the Talma Arntz and the Gerald L. Arntz Revocable Trust.” This failure to properly document client accounts and follow required protocols represents a significant breach of fiduciary duty and industry standards.

The claimed damages in this case amounted to $275,000, indicating a substantial potential loss for the affected clients. According to FINRA records, this matter was settled in May 2024 for $135,000, with the entire settlement paid by the firm rather than Lundgaard personally. This settlement pattern is common in the industry and often indicates the firm’s acknowledgment of potential supervisory failures.

What makes this case particularly concerning is that Lundgaard is no longer registered as a broker or investment advisor. His registration with Kestra Investment Services was terminated in August 2023, shortly after the formal complaint was filed. This timing raises questions about whether the firm’s internal review prompted his departure or if other undisclosed violations may have occurred.

Historical Background: Lundgaard’s Career and Red Flags

Thomas Lundgaard’s career in the financial services industry spans nearly three decades, beginning in 1996 when he first obtained his securities licenses. His employment history shows he worked with several notable firms:

1. SunAmerica Securities (November 1996 – October 2005)
2. SagePoint Financial (October 2005 – January 2009)
3. SII Investments (January 2009 – July 2016)
4. Kestra Investment Services (July 2016 – August 2023)

During his career, Lundgaard passed multiple industry examinations, including the Securities Industry Essentials Examination (SIE), General Securities Representative Examination (Series 7), and Investment Company Products/Variable Contracts Representative Examination (Series 6). He also held multiple state securities licenses, including the Uniform Combined State Law Examination (Series 66) and Uniform Securities Agent State Law Examination (Series 63).

Despite these qualifications, Lundgaard’s record contains concerning disclosures. In addition to the recent customer dispute, his record includes a criminal charge from 1974 for illegal possession of marijuana. While this charge was ultimately dropped and occurred long before his financial career began, it represents a disclosure that Lundgaard was required to report to regulators.

More concerning is Lundgaard’s complex business structure. FINRA records indicate he simultaneously operated several business entities, including:

1. TBL Financial LLC – Reportedly for payroll processing
2. Kestra Advisory Services, LLC – For investment advisory services
3. Watermark Wealth Strategies North, LLC – For office space leasing
4. Watermark Wealth Strategies, LLC – As a financial advisor and fiduciary

This complex web of business entities, while not necessarily improper, can sometimes indicate an attempt to compartmentalize activities or create confusion around responsibilities and oversight. Such structures deserve closer scrutiny when allegations of misconduct arise.

Red Flags & Warning Signs for Investors

The Lundgaard case highlights several red flags that investors should be vigilant about when working with any financial advisor:

1. Documentation Failures

The primary allegation against Lundgaard involved failing to obtain required documentation for trust accounts. Proper documentation is fundamental to financial advising, particularly for trust accounts where fiduciary responsibilities are heightened. When an advisor fails to maintain proper documentation, it can indicate:

• Carelessness or neglect of basic professional responsibilities
• Attempts to obscure account activities or avoid oversight
• Potential unauthorized activities that documentation would have prevented
• Violation of firm policies and regulatory requirements

2. Termination Following Complaints

Lundgaard’s registration with Kestra Investment Services ended in August 2023, approximately a year after the initial complaint was filed. While the precise reason for his departure is not stated in the FINRA report, the timing suggests a possible connection to the pending customer dispute. When an advisor leaves a firm while under investigation or facing customer complaints, it often indicates:

• The firm’s loss of confidence in the advisor
• Potential discovery of additional violations during internal review
• An attempt by the firm to limit liability
• Possible regulatory pressure or scrutiny

3. Complex Business Structures

As noted, Lundgaard operated through multiple business entities simultaneously. While diversification is common in the industry, investors should be cautious when advisors operate through multiple LLCs or maintain separate business identities. This complexity can:

• Create confusion about which entity is responsible for investment decisions
• Complicate supervision and compliance monitoring
• Make it difficult to determine where fiduciary responsibilities lie
• Potentially obscure conflicts of interest

4. History of Regulatory Issues

While Lundgaard’s criminal charge from 1974 was ultimately dismissed and occurred long before his financial career, any disclosure on a FINRA record warrants attention. Clean regulatory records are the norm in the industry, and any exceptions should prompt additional due diligence by investors.

Legal & Regulatory Framework: Understanding Violations

Financial advisors like Thomas Lundgaard operate within a strict regulatory framework designed to protect investors. Several FINRA rules and SEC regulations are particularly relevant to the allegations in this case:

FINRA Rule 2010: Standards of Commercial Honor and Principles of Trade

This fundamental rule requires brokers to observe high standards of commercial honor and just and equitable principles of trade. Failure to maintain proper documentation, particularly for trust accounts, likely violates this standard by falling short of the professionalism expected in the industry.

FINRA Rule 4512: Customer Account Information

This rule explicitly requires member firms to maintain specific information for each customer account, including names of associated persons responsible for the account. Firms must also maintain account records and documentation for a specified period. Lundgaard’s alleged failure to obtain required documentation for trust accounts directly implicates this rule.

FINRA Rule 3110: Supervision

While directed at firms rather than individual brokers, this rule requires brokerage firms to establish and maintain a system to supervise activities of their brokers that is reasonably designed to achieve compliance with securities laws and regulations. The settlement payment coming entirely from the firm rather than Lundgaard may indicate Kestra recognized potential supervisory failures.

SEC Fiduciary Standards for Investment Advisers

As both a broker and investment adviser, Lundgaard was subject to fiduciary duties requiring him to act in clients’ best interests, provide full disclosure of material facts, and avoid conflicts of interest. Failure to properly document trust accounts potentially breaches these fundamental obligations.

Guidance for Affected Investors: Steps to Protect Your Interests

If you were a client of Thomas Lundgaard or have concerns about similar issues with your current financial advisor, there are several steps you should consider taking to protect your interests:

1. Review Your Account Documentation

Start by gathering and reviewing all documentation related to your accounts, including:

• Account opening documents
• Trust documents if applicable
• Investment strategy statements
• Transaction confirmations
• Account statements
• Correspondence with your advisor

Pay particular attention to any trust accounts or special account designations to ensure all required documentation is in place and properly executed.

2. Verify Your Account Designations

If you have established special account designations like Transfer on Death (TOD), trust ownership, or beneficiary designations, verify these are correctly documented and reflect your current intentions. Improper documentation in these areas can have serious consequences for estate planning and asset distribution.

3. Consult with an Independent Financial Professional

Consider having an independent financial professional review your portfolio and account documentation to identify any irregularities or concerns. Look for someone who:

• Has no connection to your current or former advisor
• Charges a flat fee rather than commissions
• Holds fiduciary credentials (such as a CFP® designation)
• Has experience with trust accounts if relevant to your situation

4. Understand the FINRA Arbitration Process

If you identify potential misconduct, understand that FINRA arbitration is typically the venue for resolving disputes with brokers:

• Claims must generally be filed within six years of the event
• The process is typically faster and less formal than court litigation
• Decisions are binding and difficult to appeal
• Evidence standards differ from traditional courtrooms
• Specialized attorneys experienced in securities arbitration can significantly improve outcomes

5. Document Timeline and Communications

Create a chronological record of all interactions with your advisor, including:

• Dates of meetings and phone calls
• Summaries of advice received
• Investment recommendations and rationales provided
• Questions asked and answers received
• Concerns raised and responses given

This documentation can be crucial if you need to pursue a claim or complaint.

How Our Securities Fraud Attorneys Can Help

Our investment fraud attorneys specialize in helping investors recover losses caused by broker misconduct and negligence. We understand the complex regulatory framework that governs financial advisors and have extensive experience with cases involving documentation failures, trust account mismanagement, and fiduciary breaches.

When you work with our firm, you benefit from:

Comprehensive Financial Forensics

Our team conducts thorough forensic analyses of your investment accounts to identify potential misconduct, including:

• Unauthorized transactions
• Excessive trading (churning)
• Unsuitable investment recommendations
• Inadequate documentation
• Misrepresentations or omissions
• Failure to follow client instructions

Using sophisticated analytical tools, we can detect patterns and practices that may indicate wrongdoing even when not immediately apparent to clients.

Regulatory Expertise

Our attorneys maintain deep knowledge of FINRA rules, SEC regulations, and state securities laws. This expertise allows us to:

• Identify specific rule violations in your case
• Determine appropriate venues for complaints or claims
• Leverage regulatory requirements in settlement negotiations
• Coordinate with regulatory investigations when appropriate

Contingency Fee Structure

We understand that investors facing losses may be concerned about legal costs. Our firm works on a contingency fee basis, meaning:

• No recovery, no fee
• Initial consultations are free and confidential
• You pay nothing upfront
• Our interests are aligned with maximizing your recovery

Client-Centered Approach

Each investment fraud case is unique, and we provide personalized attention to every client. Our process typically includes:

• Detailed initial consultation to understand your specific situation
• Regular updates on case progress
• Clear explanations of legal options and strategies
• Transparent communication about potential outcomes
• Prompt responses to your questions and concerns

Don’t let documentation failures or trust account mismanagement compromise your financial future. If you’ve worked with Thomas Lundgaard or have concerns about similar issues with another advisor, taking prompt action is essential to protect your rights and potential recovery options.

If you have questions about your investments or suspect misconduct, take the first step today. Call 800-950-6553 or fill out our secure online form to schedule a confidential, no-obligation consultation with our experienced investment fraud attorneys.

Chetan Patil

Chetan Patil is the founder and Managing Partner of the Patil Law. He brings over 15 years of extensive experience in diverse complex disputes and transactions, across the country. Mr. Patil specializes in litigations, trials, arbitrations, and appeals of complex securities, FINRA, financial and business disputes, with an emphasis in securities, financial services, and financial regulatory law.