FINRA Arbitrators Orders Oppenheimer To Pay Another $14M In John J. Woods Case

Former Oppenheimer broker, John J. Woods has pleaded guilty to running a $110 million Ponzi scheme that defrauded approximately 400 investors across 20 different states. Many of the victims have filed FINRA arbitration claims against brokerage firm Oppenheimer alleging that the firm failed to take appropriate action to stop the Ponzi scheme or otherwise to warn victims, many of whom were elderly retirees. Among other things, investors have accused Oppenheimer of ignoring signs that Woods was selling the fraudulent investment, Horizon Private Equity. In one of those recent FINRA cases, a panel of three FINRA arbitrators has ordered Oppenheimer to pay approximately $14 million, plus attorneys’ fees, to a group of investors.

Woods apparently promised investors a 6% to 7% return from Horizon, which purportedly would invest in government bonds, stocks, and real estate. In typical Ponzi-scheme fashion, however, the money received from new investors was not invested in a diverse portfolio, and instead, was used to pay returns to earlier investors. This allowed Horizon to pay guaranteed returns to investors only by raising and using new investor money.

Oppenheimer supervisors allegedly were aware of Woods’ Horizon business enterprise as early as 2006. But the brokerage firm was slow to take appropriate action. By the time Woods left Oppenheimer in 2016, he had a clean record and the imprimatur of an ex-Oppenheimer broker, allowing him to keep approaching new investors.

The FINRA arbitrators’ latest award against Oppenheimer stated that Oppenheimer engaged in gross negligence by failing to supervise John J. Woods, allowing the Horizon Ponzi scheme to operate out of Oppenheimer’s Atlanta branch office. The failure to supervise consisted of, among other things, failing to investigate or inadequately investigating multiple red flags that should have alerted Oppenheimer to the Ponzi scheme, relying on the self-serving statements of employees concerning the red flags, and facilitating Horizon’s accounting, investing, and payments of dividends to investors.

If you lost money in John Woods’ Horizon Ponzi scheme, contact an experienced securities lawyer at Dimond Kaplan and Rothstein P.A. today.

Dimond Kaplan and Rothstein P.A. (DKR) is recognized nationally for its work representing investment fraud and stockbroker negligence victims. DKR represents investors in the United States and Latin America who have experienced investment losses due to broker or brokerage firm wrongdoing. If you have experienced investment losses, please do not hesitate to call us at 1.855.758.0653 for a FREE case evaluation or fill out our contact form to schedule a free consultation. We represent individuals, trusts, corporations, and institutions in claims against brokerage firms, banks, and insurance companies on a contingency fee basis.

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