Woodbridge Wealth has been the subject of an SEC investigation since 2016. Allegations against the company include unregistered brokers and securities. The SEC sought documents from the company in 2016, but Woodbridge failed to meet the deadline. In response, the SEC issued a subpoena, which the company has yet to comply with in full.
A financing scam run by the Woodbridge Group of Companies LLC (Woodbridge Wealth/Woodbridge Investments), a luxury real estate developer based in greater Los Angeles, claimed the lives of numerous investors, including hedge fund managers and many senior citizens in retirement. Overall, the scam—which the Securities and Exchange Commission called a Ponzi scheme—affected over 8000 people (SEC). The $1.2 billion plan was the subject of an SEC lawsuit, and Woodbridge later declared bankruptcy.
Unfortunately, there is a limited time for investors to recover their losses from Woodbridge investments. If you or someone you know invested with Woodbridge securities, please contact our investment fraud lawyers for a free consultation at 1-888-628-5590.
This article will provide an overview of the events surrounding the company.
SEC investigation into Woodbridge Group & Woodbridge Securities
The Security & Exchange Commission has launched an investigation into the Woodbridge Group, a real estate investment firm. Its founder, Shapiro, made false statements to investors about the investment firm’s business practices. Woodbridge promoted its investment in the Roaring Fork Valley as conservative, low-risk and simple. However, the company failed to disclose that it was using investor funds to pay prior investors and third-party affiliates.
In August, the SEC served subpoenas to all 235 LLCs owned by the Woodbridge Group. The agency is seeking documents pertaining to the financial records of the members and managers of the group, as well as emails from salespeople and executives. It alleged that the defendants sold Woodbridge securities improperly. The Woodbridge Group denies any wrongdoing and has since sent millions of documents to the SEC. Nonetheless, the SEC’s investigation is just the latest slap in the face of Woodbridge’s business practices.
The SEC investigation into Woodbridge Group’s operations came after several complaints were filed against the company. The securities offered by Woodbridge were fraudulent, and the company had no registration with the SEC. In addition, several employees of the Woodbridge Group were paid excessively despite not having earned much at all. The company claimed that these employees were compensated for their efforts, but they were receiving illegal payments from investors.
In a letter to its creditors, the SEC reported that the Woodbridge Group of Companies failed to pay dividends to investors. This action came amid a SEC investigation into the company’s operations. The company reportedly mismanaged the funds of thousands of investors. In response, SEC investigators obtained court orders to force Woodbridge to open its books and conduct a forensic examination of its financial records. It also suspended payments to its creditors, including the elderly who invested in the firm’s bonds.
The SEC alleges that Shapiro diverted $35 million from investors to pay himself and his sales agents. Instead of paying investors, he used this money to buy personal cars, charter flights, and even pay off his ex-wife. The investigation was launched after the company’s payments to investors ceased in December. Eventually, the SEC ordered Woodbridge to file for Chapter 11 bankruptcy protection. There are currently more than 2,000 investors who lost $400 million in Woodbridge.
SEC subpoenas for documents of Woodbridge Securities Companies llc
The recent court order forcing the Woodbridge Group of Companies LLC to turn over documents relating to its business practices has led many to question whether the SEC has the authority to issue such a subpoena. While the Fifth Amendment protects people from answering questions that can incriminate them, it does not apply to answers that might damage their reputation. The company has not complied with this court order and has filed an action seeking contempt of court.
The SEC (Securities and Exchange Commission) has issued subpoenas to Woodbridge limited liability companies. The documents are related to allegations that the company misled investors and violated securities laws. The SEC also has a long history of investigating companies involved in real estate matters. In the past, Woodbridge has received numerous lawsuits and a cease-and-destruction order in Texas for allegedly violating securities laws.
Woodbridge Promoted Investments
The SEC’s investigation of Woodbridge began in September 2016 and has focused on potential violations of the securities laws, including the sale of securities by unregistered brokers. Woodbridge internal sales agents allegedly used high pressure sales tactics to promote Woodbridge investments. It also wants to know about payments issued by Woodbridge-linked LLCs, the names of their members, the financial institutions used by these LLCs, and the identities of the owners. Further, the SEC’s subpoenas are intended to help it find out whether Woodbridge made false statements about its business practices, Woodbridge’s Finances, Woodbridge sales operation, new investor money and how it spent investor money.
SEC subpoenas for the Woodbridge documents are the latest in a long-running legal battle between the SEC and Woodbridge. This case has resulted in the filing of an application by the SEC lawyers to compel Woodbridge to comply with a series of subpoenas relating to its business. The SEC is now seeking a contempt of court order after the company’s executives allegedly failed to comply with subpoenas.
Several Woodbridge affiliates are being investigated by the SEC, and this latest investigation has led to the filing a class action lawsuit against the firm. The SEC’s subpoenas were issued against the company after it failed to comply with its orders to cease selling unregistered securities. The SEC has been demanding information from these affiliates since July 2017. The SEC has imposed the civil penalty on Woodbridge for failing to comply with a Massachusetts order, and it has requested that the companies comply with the orders.
Ivan Acevedo banned from the securities industry
Ivan Acevedo was barred from the securities industry last month following his plea to a conspiracy to commit mail and wire fraud concerning investor money. He is currently in federal custody. Previously, Acevedo worked as a sales manager for Woodbridge, a brokerage firm, between 2013 and 2017. Last month, he settled the case for $3.75 million. If convicted, he could be banned from the securities industry.
The case was first reported by the Wall Street Journal in September 2017. The charges were made against Acevedo and his business partner, Dane Roseman. They are accused of violating the anti-fraud provisions of the Securities Act of 1933, Section 10b-5, Section 5(a), and the broker-dealer registration laws. The SEC is seeking to reclaim ill-gotten gains and impose financial penalties.
The case centered on how Shapiro and his partners misled investors by promising a 10% return on loaning money to developers. The trouble is that these properties did not exist when they were promised. And the fraud was even worse: some investors received as little as 30 to 50 cents on the dollar for their losses. Some Woodbridge investors have lost as much as $36 million and have been forced to wait years for their money to be repaid.
A U.S. securities regulator has subpoenaed the 235 LLCs controlled by Woodbridge, which has accused the firm of defrauding its investors. The alleged scheme involved Woodbridge raising funds to invest in luxury real estate and extending loans to commercial property developers. In response, the company filed for bankruptcy, and its chief executive officer, Lawrence Perkins, resigned. According to a statement released by the company on Friday, the company will pay Mr. Shapiro’s resignation effective March 31, 2019.
Shapiro, who ran the company, pleaded guilty to mail and wire fraud and income tax evasion in August. The court rejected the defense’s request for less time and sentenced Shapiro to a maximum of 25 years in prison. Woodbridge’s main business model was based on soliciting money from investors through promissory notes – and misrepresenting the amounts to investors in order to collect high monthly interest rates.
The SEC alleges that the Woodbridge company defrauded seniors by selling them a “risk-free” business model based on lies. According to TRD, Shapiro was the man behind Mercer Vine, a buzzy residential brokerage in New York. Shapiro’s resignation is the result of the investigation. A former executive of the brokerage resigned on Monday, and the firm has filed for bankruptcy.
The SEC is pursuing the return of at least $21 million in investor funds. The SEC’s complaint states that Shapiro misused the funds for personal expenses. In the wake of the allegations, Woodbridge ceased paying its investors and filed for Chapter 11 bankruptcy protection. The company also faces a court filing for fraud. However, the company is not denying the charges and is considering a new board to address the crisis.
Shapiro’s resignation is due to a number of reasons. The company raised more than $1 billion from investors. As a result, the SEC is investigating the Woodbridge Group of Companies for selling unregistered securities. The company’s alleged misconduct has resulted in Mr. Shapiro resigning his position as CEO. While Robert Shapiro will remain a consultant to the company, the SEC will continue to investigate the company.