Meyer Wilson Representing Investors in Securities Fraud Claims Involving
The investment fraud lawyers at the law firm of Meyer Wilson have been
contacted by investors regarding potential securities fraud claims involving
the Woodbridge Group of Companies, LLC, including its affiliate Woodbridge
Wealth. Based on our investigation, it appears that investors may have
been improperly sold unregistered securities in violation of federal and
state securities laws. We are currently representing investors to pursue
claims to recover their investment losses suffered in Woodbridge.
Listen to Managing Partner David Meyer’s recent radio broadcast about
potential individual investor claims relating to Woodbridge Group and
its Woodbridge Mortgage Funds.
Listen To Radio Show Here
On December 20, 2017, the Securities & Exchange Commission filed a
Complaint for Injunctive Relief against Woodbridge, its founder and former
principal, Robert Shapiro, and numerous LLCs allegedly controlled or operated
by Shapiro. The SEC’s Complaint alleges:
Beginning in July 2012 through December 4, 2017, Defendant Robert H. Shapiro
("Shapiro") used his web of more than 275 Limited Liability
Companies to conduct a massive Ponzi scheme raising more than $ 1.22 billion
from over 8,400 unsuspecting investors nationwide through fraudulent unregistered
securities offerings. Shapiro promised investors they would be repaid
from the high rates of interest Shapiro's companies were earning on
loans the companies were purportedly making to third-party borrowers.
However, nearly all the purported third-party borrowers were actually
limited liability companies owned and controlled by Shapiro, which had
no revenue, no bank accounts, and never paid any interest under the loans.
On December 4th, just weeks before the SEC action was filed, Woodbridge
filed for Chapter 11 bankruptcy protection. The very next day, Shapiro
resigned from the company.
Prior to the bankruptcy announcement, Woodbridge informed investors that
the firm was stopping dividend payments to its investors. Citing litigation
and compliance costs, Woodbridge announced on its website:
Historically a leading developer of high-end real estate, as the size and
scope of the business has grown, increased operating and development costs
have been exacerbated by the unforeseen costs associated with ongoing
litigation and regulatory compliance. This combination of rising costs
and regulatory pressure led to a loss of liquidity, resulting in Woodbridge's
inability to make its regularly scheduled one-year notes payment due Dec. 1, 2017.
As of today, Woodbridge’s website is still active. The site states
that its wealth management group, Woodbridge Wealth, sells secondary market
annuities with "above average, risk adjusted yields", and a
commercial bridge loan fund that potentially returns 6%. The lawyers at
Meyer Wilson have reviewed filings with the Financial Industry Regulatory
Authority (FINRA), the self-regulatory organization that oversees brokerage
firms. There is no broker-dealer named Woodbridge Wealth registered with FINRA.
The lawyers at Meyer Wilson have also reviewed documents that Woodbridge
filed with the SEC in connection with selling securities to investors.
That review identified at least six different LLCs that Woodbridge sold
to investors as Regulation D offerings. Regulation D under the Securities
Act of 1933 allows some companies to offer and sell their securities without
having to register the offering with the SEC.
SEC records show the following LLCs that Woodbridge sold to investors:
Woodbridge Mortgage Investment Fund 1, LLC; Woodbridge Mortgage Investment
Fund 2, LLC; Woodbridge Mortgage Investment Fund 3, LLC; Woodbridge Mortgage
Investment Fund 3A, LLC; Woodbridge Mortgage Investment Fund 4, LLC; and
Woodbridge Structured Funding, LLC.
In addition to the pending SEC investigation, Woodbridge has also been
the subject of various investigations by state regulators.
In August 2017, Woodbridge Investment Fund 2 was ordered to pay a $500,000
fine as part of a cease and desist order issued by the State of Michigan
Corporations, Securities & Commercial Licensing Bureau. Woodbridge
was accused of improperly selling unlicensed securities to Michigan residents.
In April 2017, the Pennsylvania Bureau of Securities Compliance and Examinations
entered into an agreement with Woodbridge Structured Funding settling
allegations that the firm was improperly selling unregistered securities
in Pennsylvania. Woodbridge admitted no wrongdoing in that case but consented
to a $30,000 fine.
In May 2015, Woodbridge Mortgage Investment Funds 1, 2, and 3 settled similar
allegations brought by the Massachusetts Securities Division and agreed
to a $250,000 fine.
If you invested in Woodbridge and have questions about your legal options,
contact the experienced investment fraud lawyers at the law firm of Meyer
Wilson. Since 1999, we have represented over 1,000 investors and recovered
over $300,000,000 on behalf of their clients. We represent clients nationwide
with offices in California, Ohio and Michigan.