On April 11, 2019, the Securities and Exchange Commission charged two former directors of investments at Woodbridge Group of Companies LLC for their roles in its massive Ponzi scheme. The defendants, California-based Ivan Acevedo and Dane R. Roseman, were separately arrested and charged by criminal authorities, along with Woodbridge owner Robert H. Shapiro.
The SEC previously charged Woodbridge and Shapiro, and Woodbridge's highest-earning unregistered brokers. In January, a federal court in Florida ordered Woodbridge, related companies, and Shapiro together to pay $1 billion for operating this Ponzi scheme.
According to the SEC's complaint, although Acevedo and Roseman were not registered in any capacity with the SEC, they were responsible for fraudulently raising at least $1.2 billion from more than 8,400 retail investors, many of them seniors, and together received more than $3 million in transaction-based and other compensation.
The complaint, filed in U.S. District Court for the Southern District of Florida, alleges that Acevedo oversaw Woodbridge's fundraising for Woodbridge's securities from 2012 until his departure in 2015, when he was succeeded by Roseman. According to the complaint, the defendants were responsible for hiring and training Woodbridge's sales force, approved fraudulent marketing materials and sales scripts, and helped create the false appearance that Woodbridge was a legitimate operation when in reality it was a Ponzi scheme that used money from new investors to pay existing investors.
The SEC's complaint charges Acevedo and Roseman with violating the anti-fraud provisions of the federal securities laws, Section 17(a) of the Securities Act of 1933 ("Securities Act") and Section 10b-5 of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder; the securities registration laws, Sections 5(a) and 5(c) of the Securities Act; and the, broker-dealer registration laws, Section 15(a)(1) of the Exchange Act, and seeks disgorgement of allegedly ill-gotten gains, with interest, and financial penalties.
The SEC's investigation, which is continuing, was conducted by Scott A. Lowry, Russell Koonin, Christine Nestor, and Mark Dee in the Miami Regional Office, with assistance from David Baddley, and supervised by Jason R. Berkowitz, Fernando Torres, Thierry Olivier Desmet, and Glenn Gordon. The litigation will be led by Ms. Nestor and Mr. Koonin under the supervision of Andrew O. Schiff. The SEC appreciates the assistance of the Florida Office of Financial Regulation, the U.S. Attorney's Office for the Southern District of Florida, the Miami field office of the Federal Bureau of Investigation, and the Internal Revenue Service, Criminal Investigations.
The SEC's Office of Investor Education and Advocacy has issued an Investor Alert to help seniors identify signs of investment fraud and, in conjunction with the Division of Enforcement's Retail Strategy Task Force, another Investor Alert about Ponzi schemes targeting seniors. The SEC strongly encourages investors to use the agency's http://Investor.gov website to check the backgrounds of people selling them investments to quickly identify whether they are registered professionals.