SEC Charges 13 Unregistered Brokers for Selling Woodbridge Securities to Retail Investors
The Securities and Exchange Commission has charged an additional 13 individuals and 10 companies for unlawfully selling securities of Woodbridge Group of Companies LLC to retail investors.
The Securities and Exchange Commission has charged an additional 13 individuals and 10 companies for unlawfully selling securities of Woodbridge Group of Companies LLC to retail investors. Woodbridge collapsed into bankruptcy in December 2017 and the SEC previously charged the company, its owner and others with operating a $1.2 billion Ponzi scheme and charged five of the top Florida-based sales agents for securities and broker-dealer registration violations.
Woodbridge CEO Robert Shapiro previously agreed to pay $120 million to settle fraud charges in the alleged scheme, without admitting or denying the charges.
The latest defendants were among Woodbridge’s top revenue producers, selling more than $350 million of its unregistered securities to more than 4,400 investors.
According to the complaints, the 13 individuals allegedly marketed Woodbridge’s securities as a “safe” and “secure” investment and reaped millions of dollars in commissions on their sales even though they were not registered as, or associated with, registered broker-dealers.
The SEC also alleges that defendant Jordan Goodman, a self-described “media influencer,” touted Woodbridge without disclosing that he was paid to do so.
“The SEC has now charged 18 of Woodbridge’s highest-earning unregistered sales agents who sold more than $400 million of its securities to retail investors,” said Eric Bustillo, director of the SEC’s Miami Regional Office. “Our continuing investigation of Woodbridge seeks to hold those who aided this massive fraud accountable and to return funds to harmed investors.”
In its latest actions, the SEC is seeking court-ordered injunctions, return of allegedly ill-gotten gains with interest, and financial penalties against Robert S. “Lute” Davis, Jr., Donald Anthony Mackenzie, Jordan E. Goodman, Aaron R. Andrew, Jeffrey L. Wendel, Alan H. New, David N. Knuth, Randy T. Rondberg, Richard Fritts, Marcus Bradford Bray, Gregory W. Anderson, Claude Steven Mosley, Gregory A. Koch, and their companies Old Security Financial Group Inc., Paramount Financial Services Inc. d/b/a Live Abundant, Wendel Financial Network LLC, Synergy Investment Services LLC, Trager LLC, Fritts Financial LLC, Bradford Solutions LLC, Balanced Financial Inc., Security Financial LLC, and Koch Insurance Brokers LLC.
Goodman settled the SEC’s charges without admitting or denying the allegations and agreed to disgorgement of $2.29 million plus prejudgment interest of $315,850 and a $100,000 penalty, and to be subject to an injunction and industry and penny stock bars.
Synergy Investment Services, New, and Knuth settled the SEC’s charges without admitting or denying the allegations with the court to determine disgorgement, interest, and penalties at a later date.
The SEC also reached settlements in its previously filed action against Florida-based sales agents Barry M. Kornfeld, Ferne Kornfeld, and Albert D. Klager. Without admitting or denying the allegations, the three agreed to a permanent injunction and industry and penny-stock bars. The Kornfelds agreed to disgorgement of $3.7 million plus $690,497 in prejudgment interest.
Additionally, Barry Kornfeld agreed to a $500,000 penalty and Ferne Kornfeld agreed to a $150,000 penalty. Klager agreed to $1.4 million in disgorgement, $278,908 in prejudgment interest, and a $100,000 penalty.
In other Woodbridge news, last month, FINRA barred former Quest Capital broker Frank Dietrich for selling his clients more than $10.8 million in Woodbridge promissory. He consented to the bar without admitting or denying the allegations.
