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 ensaring 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.
One of Woodbridge’s agents was Jerry Raines (Raines) formerly associated with HD Vest Investment Services (HD Vest). A dozen clients have alleged that Raines recommended Woodbridge causing a near complete loss of their investments. Federal securities laws and the FINRA rules require firms to monitor and supervise its employees, like Raines, 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.
The signs that the Woodbridge Funds was a giant fraud debacle ware all apparent. Woodbridge and its agents have been sanctioned by multiple state regulators for offering unregistered securities. Going back to May 2015, the Massachusetts Securities Division imposed a bar on the Woodbridge Mortgage Investment Funds and ordered the companies to permanently cease and desist from selling unregistered or non-exempt securities in the Commonwealth of Massachusetts.