A judge in the U.S. District Court for the Southern District of Florida recently ordered the Woodbridge Group of Companies LLC (“Woodbridge”), its former owner Robert H. Shapiro, and 281 Woodbridge-affiliated companies, to pay a total of $1 billion over a Woodbridge Ponzi scheme that the SEC says defrauded over 8,000 investors. $100 million in civil penalties were assessed against Shapiro alone.

The aggrieved investors were “Main Street investors” investing for their own accounts, not institutional investors acting as agents for corporate interests. As such, most of them could not be classified as “sophisticated investors” — in fact, a great many were senior citizens who trusted Woodbridge with their retirement savings. Allegedly, investors were duped by a complex and deceptive network of shell companies whose purpose was to conceal the true nature of the scheme. Moreover, a network of brokers and former brokers unethically promoted the securities offered by Woodbridge over a five-year period.

SEC Regulatory Action and Civil Complaint

In December 2017, the SEC filed a complaint against Woodbridge. It also froze Woodbridge’s assets to prevent further dissipation of investor funds. The SEC’s allegation of “Ponzi payments” to investors means that early investors were paid with funds provided by later investors rather than with profits, resulting in an unstable financial scheme whose eventual collapse was mathematically inevitable.

Investor Litigation

Predictably, Woodbridge collapsed and entered bankruptcy with massive losses to investors Although the District Court order should result in significant reimbursement to defrauded investors, it will not compensate for all of the losses. Investors are not waiting around for justice, however — they are filing claims against parties related to Woodbridge.

In some cases they are targeting the brokerage firms that employed brokers who sold the investments. Those claims asset that the firms are liable for the brokers’ sales misconduct. At least one arbitration tribunal has ruled that brokerage firm liability extends to losses suffered by investors who were not even clients of the brokerage firm.

Investors May Have a Claim Against Woodbridge

If you lost money as a result of the Woodbridge Ponzi Scheme you should seek the advice of a lawyer who has experience representing investors in investment fraud and Ponzi scheme cases to discuss your rights.

Speak with an Investment Fraud Attorney Today

Dimond Kaplan & Rothstein, P.A. has vast experience in representing investors who have sustained losses due to the negligence or misconduct of their broker and/or brokerage firm. We will aggressively pursue claims and fight for your rights.

If you are looking for an investment fraud attorney to review your rights and options, the investment fraud lawyers at Dimond Kaplan & Rothstein, P.A. represent individual and institutional investors who have lost money as a result of investment fraud or stockbroker misconduct. We’ve recovered more than $100 million in assets lost to investment fraud and stockbroker misconduct.

Contact Dimond Kaplan & Rothstein Today

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