The Financial Industry Regulatory Authority (FINRA) mandated that Oppenheimer & Co. Inc. compensate several victims of a Ponzi scheme with nearly $14 million. The scheme, which targeted 400 elderly investors, was orchestrated by a former Oppenheimer broker, John J. Woods. These investors purchased shares in the purported Ponzi scheme, known as the Horizon Private Equity III fund, which was established by Woods.
John J. Woods, a former Oppenheimer broker, is at the center of an alleged Ponzi scheme involving the Horizon Private Equity III fund. The scheme allegedly defrauded hundreds of investors of over $110 million between 2008 and 2016. Woods, along with his affiliated firms, Livingston Group Asset Management Company, and Southport Capital, are facing multiple lawsuits and investigations for their involvement in the scheme.
The Horizon Private Equity III Ponzi Scheme
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According to the Dept. of Justice, Woods created the Horizon Private Equity III fund, promising investors a 6% to 7% yearly return on their investments. He assured potential investors that the fund was safe and low-risk, and their money would be used for various activities such as government bonds, stocks, or small real estate projects. Investors were also reassured that they could retrieve their principal without penalty after a short period.
However, it is alleged that Woods and his co-conspirators used new investor funds to pay returns to earlier investors, a classic Ponzi scheme characteristic. The scheme mainly targeted retirees, and more than 400 investors fell victim to the intricate scheme.
The Role of Oppenheimer and Southport Capital
Woods allegedly used Southport Capital, an investment advisory firm, to move customer accounts from Oppenheimer and lure investors into the Horizon Ponzi scheme. Southport Capital, which reported over $824 million in assets under management, was affiliated with Woods.
Oppenheimer, the broker-dealer, is accused of disregarding warning signs that Woods was bilking investors, which allowed him to transfer millions of dollars of their money. In August 2021, investors filed a class-action securities lawsuit against Oppenheimer for the losses they sustained in the alleged $110M Ponzi scheme.
Investigations and Legal Actions
In August 2021, the SEC obtained an emergency asset freeze against John Woods and Horizon Private Equity, charging them with fraud. The case remains ongoing. Woods is also being formally investigated by the SEC since August 2021 for his involvement in the alleged Ponzi scheme. On March 24, 2023, Woods pleaded guilty to the multimillion-dollar Ponzi scheme.
Haselkorn & Thibaut has initiated an investigation and is seeking to recover losses for Horizon Private Equity III investors. Our lawyers have experience representing victims of Ponzi schemes and investment fraud, and they aim to help investors recover their losses.
In September 2022, Oppenheimer Horizon investors won over $36 million in a FINRA arbitration case following the alleged Ponzi scheme. According to investorlawyers.com, Horizon Private Equity III investors seeking to recover their investment losses should file a FINRA arbitration case against Oppenheimer.
Impact on Investors and Lessons Learned
The Horizon Private Equity III Ponzi scheme has left hundreds of investors with significant financial losses, many of whom are retirees. The case serves as a reminder of the importance of investor vigilance and due diligence when considering investment opportunities. It also highlights the potential for investment advisors and broker-dealers to facilitate fraudulent schemes if they disregard warning signs and fail to adequately supervise their representatives.
Moreover, the case underscores the need for strong regulatory oversight and enforcement to protect investors from such schemes. The SEC’s investigation and emergency asset freeze against Woods and Horizon Private Equity demonstrate the agency’s commitment to holding those involved in fraudulent schemes accountable.
Conclusion
The alleged Ponzi scheme involving the Horizon Private Equity III fund, orchestrated by John J. Woods, a former Oppenheimer broker, serves as a cautionary tale for investors. The case highlights the need for due diligence, strong regulatory oversight, and the crucial role of law firms in helping investors recover their losses. With ongoing investigations and legal actions, investors affected by the scheme can hope for some measure of financial recovery, as demonstrated by the recent $36 million FINRA arbitration award against Oppenheimer
As the legal proceedings continue, it is essential for investors to stay informed about the case’s developments and seek legal assistance from experienced investment fraud law firms, such as Haselkorn & Thibaut. With a 98% success rate and a history of recovering millions for investors, law firms like Haselkorn & Thibaut can provide valuable guidance and representation in pursuing claims and recovering losses from such fraudulent schemes.
Additionally, investors should take this case as an opportunity to learn about the risks involved in investing and the importance of conducting thorough research on investment opportunities, as well as the individuals and firms managing those investments. By staying vigilant and working with reputable investment professionals, investors can better protect themselves from falling victim to similar schemes in the future.
In conclusion, the Horizon Private Equity III Ponzi scheme serves as a stark reminder of the potential dangers and risks involved in investing. By staying informed, conducting due diligence, and seeking legal assistance when necessary, investors can take proactive steps to protect their financial interests and recover losses resulting from fraudulent schemes. As legal proceedings continue and more information emerges, it is crucial for affected investors to stay up-to-date and work closely with experienced legal professionals to navigate the complex process of seeking justice and financial recovery.
