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The Securities and Trade Fee has barred a Georgia-based advisor who swindled a whole lot of buyers throughout 20 states out of a minimum of $25 million whereas elevating rather more.
John J. Woods beforehand pleaded responsible to federal costs associated to the scheme. The trade bar comes as dozens of buyers in North Carolina state courtroom sued Oppenheimer & Co., the agency Woods was affiliated with, alleging they had been additionally victims of the scheme, in keeping with the Atlanta-Journal Structure.
The SEC bar settles costs filed towards Woods in August 2021. In line with the fee (and DOJ costs), Woods had owned a fund since 2006 referred to as Horizon Personal Fairness III, which bought the RIA Southport Capital in 2008.
He appointed a member of the family because the agency’s supervisor earlier than taking full management in 2017. Woods was additionally a minority proprietor within the Chattanooga Lookouts, a Minor League Baseball Class AA affiliate for the Cincinnati Reds, although the crew minimize ties with him after the Ponzi scheme got here to mild.
Federal prosecutors mentioned the scheme started in 2008, when Woods and different Southport advisors promised 7% curiosity on low-risk investments in month-to-month installments. However these returns had been largely coming from the inflow of latest and current buyers, a lot of whom had been retirees. The fund by no means earned “any vital earnings from professional investments,” in keeping with the DOJ.
By the point the SEC shut down the scheme in August 2021, the fund’s buyers had been within the gap for greater than $110 million in funds raised, having misplaced greater than $25 million. 4 hundred buyers had been affected in whole, and even when the fee shut down the scheme, it was persevering with to usher in about $600,000 per thirty days.
Woods additionally pleaded responsible to wire fraud costs associated to the scheme in March of this yr, and he has not but been sentenced. Although his affiliated corporations weren’t named within the DOJ or SEC filings, he labored for Oppenheimer & Co. from 2008 to 2016, in keeping with his IAPD profile, a part of the interval during which the Ponzi scheme occurred.
Final week, 30 North Carolina buyers filed a swimsuit in state courtroom accusing Oppenheimer & Co. and a number of other of its managers in Georgia of hiding Woods’ conduct from his shoppers in the course of the time he labored there, in keeping with the Atlanta-Journal Structure.
The plaintiffs within the swimsuit claimed they didn’t know in regards to the agency’s “direct involvement in and information of” the problems with the Horizon fund, in keeping with the publication. However they doubted the corporate’s claims that it didn’t know something in regards to the scheme, as earlier Horizon buyers had already made claims towards the agency and compelled executives and staff to testify about their information of Woods’ actions.
FINRA arbitrators have already dominated towards Oppenheimer & Co. in a number of actions introduced by harmed buyers. Final September, arbitrators ordered the agency to pay $35 million in damages to plaintiffs who claimed the agency violated their fiduciary duties and Georgia’s Racketeer Influenced and Corrupt Organizations (RICO) statute. (Oppenheimer & Co. later misplaced its attraction of this advantageous.)
Earlier this month, FINRA arbitrators ordered the corporate pay greater than $13 million in penalties to a different set of aggrieved Horizon buyers.
A spokesperson for Oppenheimer & Co. didn’t reply to a request for remark previous to publication.
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