SEC Charges Unregistered Broker Who Sold Retail Investors Securities in the Woodbridge and 1 Global Fraudulent Schemes
Litigation Release No. 24531 / July 15, 2019
Securities and Exchange Commission v. Henry J. Wieniewitz, III, et al., No. 19-cv-61738 (S.D. Fla. filed July 15, 2019)
The Securities and Exchange Commission today announced charges against Henry J. "Trae" Wieniewitz, III and his Knoxville, Tennessee-based company, Wieniewitz Financial, LLC, for unlawfully offering and selling securities of the Woodbridge Group of Companies, LLC and 1 Global Capital, LLC. The SEC previously charged Woodbridge, its owner, and others with operating a $1.2 billion Ponzi scheme, and charged 1 Global and its owner with operating a fraudulent scheme to misappropriate millions of dollars from investors. The SEC also charged numerous Woodbridge sales agents for various registration violations.
According to the SEC's complaint, Wieniewitz and Wieniewitz Financial illegally offered and sold Woodbridge and 1 Global securities to more than 630 retail investors from at least February 2016 to July 2018. The SEC alleges that throughout this period, Wieniewitz and his company were neither registered as broker-dealers with the Commission nor associated with a registered broker-dealer. Wieniewitz and Wieniewitz Financial raised more than $11.4 million and reaped approximately $500,000 in commissions from unlawful sales of Woodbridge securities, and raised more than $53 million and obtained approximately $3 million in commissions from unlawful sales of 1 Global securities.
The SEC's complaint charges Wieniewitz and Wieniewitz Financial with violations of the securities registration provisions of Sections 5(a) and 5(c) of the Securities Act of 1933, and the broker-dealer registration provisions of Section 15(a)(1) of the Securities Exchange Act of 1934. In its complaint, the SEC seeks court-ordered injunctions, return of allegedly ill-gotten gains with interest, and financial penalties against Wieniewitz and Wieniewitz Financial. Wieniewitz and Wieniewitz Financial settled the SEC's charges as to liability without admitting or denying the allegations, and agreed to be subject to injunctions, with the court to determine the amounts of disgorgement, interest, and penalties at a later date.
The SEC's continuing investigations into Woodbridge and 1 Global are being conducted, respectively, by Russell Koonin, Christine Nestor, and Mark Dee, supervised by Jason R. Berkowitz and Fernando Torres; and by Gary Miller and Mr. Dee, supervised by Elisha L. Frank and Mr. Torres. The SEC's Woodbridge litigation is being led by Ms. Nestor and Mr. Koonin and supervised by Andrew O. Schiff, and the 1 Global litigation is being led by Robert K. Levenson and Alejandro Soto and supervised by Mr. Schiff. The Commission appreciates the assistance of the U.S. Attorney's Office for the Southern District of Florida, the Federal Bureau of Investigation, and the Florida Office of Financial Regulation.