Securities Lawyers Blog
The attorneys at Gana Weinstein LLP are currently representing investors who have been the victim of the Horizon Private Equity III, LLC (Horizon) scam. Recently, the SEC has alleged that approximately 400 investors in Horizon were defrauded in a Ponzi scheme fashion out of over $110 million. A number of Oppenheimer & Co. Inc. (Oppenheimer) advisors were involved in the scam including Horizon’s chief architect and mastermind John J. Woods (CRD# 1949233) and his families members including broth James Wallace Woods Jr. (CRD# 734272), and cousin Michael Jeremiah Mooney (CRD# 4037101).
Woods and his cohorts used and abused their trusted positions as financial advisors to solicit Horizon to their clients making claims that Horizon was a safe investment that generated 6-7% guaranteed returns, had a guaranteed rate of return, carried little risk and were extremely safe and conservative, and that the Horizon investment was sponsored or offered by Oppenheimer. In reality, Horizon was a fraudulent venture that repaid old investors with funds raised from new investors. Horizon had few to no risk disclosures and failed to provide investors with information as to the nature of the funds’ holdings or other information that investors should have been provided with. When the SEC investigated Horizon III, the regulator found that by July 2021, Horizon III had liquid assets worth less than $16 million and had only invested $20 million in dubious small real estate projects.
Our firm is representing clients who have alleged that Oppenheimer permitted Woods and his co-conspirators to perpetrate this fraudulent scheme while turning a blind eye to numerous signs of fraud. Our firm’s investigation has revealed that Woods has been under almost continuous litigation concerning his outside business activities since at least 2007. Further, Oppenheimer was subpoenaed to produce documents and records relating to Woods’ outside business dealings in at least on litigation where Woods was accused of defrauding an investor to provide capital for one of Woods’ many businesses. In addition, court records reveal that Woods stated under oath that his failed business ventures left him personally liable for loans totaling over $6 million.
In another lawsuit, Woods purchased the clients and assets from another advisory firm for the sole purpose of acquiring fresh investor funds to further the Horizon Ponzi scheme. In his suit, Woods and his associates telephoned the financial planning clients and told them client that they were annuity experts and that they should sell their annuities to invest in the Horizon fund.
Our firm has alleged on behalf of investors that when Oppenheimer terminated John Woods at the end of 2016 the firm knew that he had lied to Oppenheimer about his involvement in numerous business ventures. The investor complaint alleges that Oppenheimer then failed to make truthful disclosures on John Woods’ Form U5 and failed to warn and provide victims of the Horizon fraud with material information concerning John Woods’ misconduct that they needed for their protection. The failure to disclose Oppenheimer’s full knowledge of the misconduct allowed John Woods and his co-conspirators to solicit additional investor funds causing further losses.
Our law firm has significant experience bringing cases on behalf of defrauded victims when their advisors engage in receiving loans from clients or selling securities sales through OBAs. The sale of unapproved investment products – is a practice known in the industry as “selling away” – a serious violation of the securities laws. Sometimes those investments have some legitimacy but often times these types of investments can end up being Ponzi schemes or the advisor can be engaging in the conversion of funds. The securities laws require firms to monitor and supervise its employees in order to detect and prevent brokers from offering investments in this fashion.
Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. Investors may be able recover their losses through securities arbitration. The attorneys at Gana Weinstein LLP are experienced in representing investors in cases of selling away and brokerage firms failure to supervise their representatives. Our consultations are free of charge and the firm is only compensated if you recover.