Last Updated: February 2025
For investors seeking to understand their rights and potential recourse regarding investments made through Woodbury Financial Services, Inc. (CRD# 421), it’s crucial to review the firm’s history, structure, and extensive regulatory record. This comprehensive analysis reveals important information about the recently closed broker-dealer.
Key Company Information
Woodbury Financial Services operated as both a broker-dealer and investment adviser firm from its establishment in Minnesota on March 15, 1968, until January 22, 2024, when it ceased broker-dealer operations. The firm was headquartered at 7755 3rd Street North in Oakdale, Minnesota.
Business Operations and Services
During its active period, Woodbury Financial Services engaged in multiple areas of financial services:
- Retail corporate equity securities trading
- Mutual fund sales
- S. government securities brokerage
- Municipal securities brokerage
- Variable life insurance and annuities
- Options trading
- Investment advisory services
- Private placements of securities
- Fixed insurance product sales
Significant Regulatory Issues and Violations
Recent Regulatory Actions (2020-2024)
1. SEC Custody Rule Violation (2023)
- $100,000 fine for failing to obtain proper verification of client funds
- Violations related to clearing agent arrangements during 2017-2022
- Required to implement new verification procedures
2. Mutual Fund Sales Practice Violations (2022)
- Failed to supervise multi-share class variable annuities
- Required to pay restitution to affected customers
Major Historical Violations (2010-2020)
1. Arizona Securities Division Action (2009-2014)
- $250,000 fine for failing to detect fraudulent conduct
- Over $2 million in customer restitution
- Required enhanced supervision of wire transfers
- Involved approximately 32 victims holding securities products
2. Wire Transfer Supervision Failures (2011)
- Failed to detect $990,000 customer fund conversion scheme
- Inadequate controls over third-party wire transfers
- $75,000 fine from FINRA
- Required implementation of new surveillance systems
3. Customer Privacy Violations (2009)
- SEC charged firm with Regulation S-P violations
- $65,000 fine for improper handling of customer information
- Required complete revision of privacy policies and procedures
- Violations involved both incoming and departing brokers
4. Variable Annuity Supervision Issues (2018)
- $250,000 FINRA fine
- Failed to properly review variable annuity transactions
- Inadequate supervision of L-share contracts with long-term riders
- Required enhancement of surveillance tools
State Regulatory Actions
1. Missouri Securities Division (2014)
- $150,000 fine plus $20,000 investigation costs
- Failed to detect representative misconduct
- Enhanced procedures for third-party transactions required
2. Vermont Securities Division (2009)
- $12,000 fine for inadequate variable annuity supervision
- Required review of subaccount allocation procedures
- Enhanced customer suitability requirements
3. Missouri Securities Division (2009)
- $6,000 fine for registration violations
- Failed to properly register investment adviser representatives
Systemic Issues Identified
The regulatory history reveals several recurring problems:
- Inadequate monitoring of wire transfers
- Insufficient review of variable annuity sales
- Poor oversight of representative activities
2. Customer Protection Issues
- Privacy violations
- Improper handling of customer information
- Inadequate safeguards against fraud
3. Compliance System Deficiencies
- Lack of adequate surveillance tools
- Insufficient procedures for detecting suspicious activities
- Poor implementation of required supervisory controls
4. Sales Practice Violations
- Unsuitable investment recommendations
- Improper share class selections
- Failure to apply available discounts
Impact on Investors
These regulatory actions highlight several areas of concern for investors:
- Risk of unauthorized transactions and fraud
- Improper handling of personal information
- Potentially unsuitable investment recommendations
- Higher fees and expenses than necessary
- Inadequate protection of customer assets
Individual Financial Advisors with Customer Complaints.
We are investigating financial advisors with this firm and will shortly update with specific individuals who have been or are currently subject to customer complaints and regulatory scrutiny.
Next Steps for Affected Investors
If you were a client of Woodbury Financial Services and experienced losses or have concerns about how your investments were handled, you may have legal recourse. The securities fraud attorneys at Patil Law, P.C. specialize in helping investors recover losses due to:
- Unauthorized account activity or wire transfers
- Variable annuity sales practice violations
- Mutual fund share class selection issues
- Privacy violations and mishandling of personal information
- Unsuitable investment recommendations
- Excessive fees and commissions
- Inadequate supervision of financial advisors
Contact Patil Law, P.C. at 800-950-6553 for a confidential consultation to discuss your situation and explore potential paths to recovery. Our experienced team can help evaluate your case and determine the best course of action to protect your financial interests.
Frequently Asked Questions About Woodbury Financial Services Claims
What should I do if I was a client of Woodbury Financial Services?
If you were a client of Woodbury Financial Services, you should:
- Gather all account statements, confirmations, and correspondence
- Review your accounts for any unauthorized transactions or excessive fees
- Document any concerns about investment recommendations or account handling
- Contact a securities fraud attorney to review your potential claims
- Consider filing a complaint with FINRA or your state securities regulator
How long do I have to file a claim?
The statute of limitations for securities fraud claims varies by state and type of claim. Generally:
- FINRA arbitration claims must typically be filed within 6 years of the event
- State securities law claims may have shorter deadlines
- The sooner you act, the better chance of preserving your rights Contact an attorney promptly to understand the specific deadlines that apply to your situation.
What types of compensation might I be eligible for?
Depending on your specific situation, you may be eligible to recover:
- Direct financial losses from unsuitable investments
- Excessive fees and commissions
- Interest on lost funds
- Costs associated with account transfers or corrections
- In some cases, punitive damages or attorneys’ fees
How do I know if my investments were mishandled?
Common signs of investment mishandling include:
- Unexpected losses that seem disproportionate to market conditions
- High-pressure sales tactics for complex products
- Frequent trading or churning in your account
- Unauthorized transactions
- Investments that don’t match your stated goals or risk tolerance
- Failure to receive important disclosures about fees or risks
What information do I need to pursue a claim?
To evaluate your potential claim, it’s helpful to have:
- Account statements and confirmations
- Any correspondence with your financial advisor
- Account opening documents
- Investment objective forms or risk tolerance questionnaires
- Notes from conversations with your advisor
- Documentation of any complaints you’ve made
How does the closure of Woodbury Financial Services affect my claim?
While Woodbury Financial Services has ceased operations, this does not necessarily prevent you from pursuing a claim. Options may include:
- Filing a FINRA arbitration claim
- Pursuing claims against successor firms
- Seeking recovery through insurance or bonds
- Filing claims with state regulatory authorities
Contact Patil Law, P.C. at 800-950-6553 for a confidential consultation to discuss your specific situation and understand your options for recovery.
This post is intended solely for informational purposes and does not constitute legal advice. Every case is unique and should be evaluated individually by qualified legal counsel. For more brokerage firm investigations by Patil Law, please visit the Brokerage Firm Investigations page.