Securities Lawyers Blog
The law offices of Gana Weinstein LLP continue to investigate the Woodbridge Group of Companies and the Woodbridge Mortgage Funds (Woodbridge). The Securities and Exchange Commission (SEC) has alleged that the Woodbridge operated a billion-dollar Ponzi scheme ensnaring about 8,400 investors. Woodbridge solicited hundreds of disreputable insurance agents and investment brokers to sell its false notes that the firm claimed to be backed by mortgages. In plain sight to regulators, Woodbridge engaged in a nationwide investment fraud by offering the sale of unregistered securities.
According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) Gary Forrest (Forrest) appears to be an agent for Woodbridge fraudulent note sales. Forrest was formerly associated with American Portfolios Financial Services, Inc. (American Portfolios) out of the firm’s Flint, Michigan office location. Thereafter, the State of Michigan Sanctioned Forrest finding that Forrest offered or sold twelve Woodbridge securities in the State of Michigan which were not federally covered, exempt from registration, or registered, in violation of the securities laws.
Federal securities laws and the FINRA rules require firms to monitor and supervise its employees, like Forrest, in order to detect and prevent brokers from offering investments in this fashion. In order to properly supervise their brokers each firm is required to have procedures in order to monitor the activities of each advisor’s activities and interaction with the public. Supervisory failures allow brokers to engage in unsupervised misconduct that can include all manner improper conduct including recommending fraudulent investments.