SEC Charges Unregistered Broker Who Sold Woodbridge Securities to Retail Investors
Litigation Release No. 24676 / November 25, 2019
Securities and Exchange Commission v. Brett Pittsenbargar, et al., Case No. 19-cv-10059 (C.D. Cal. Nov. 25, 2019)
The Securities and Exchange Commission today announced charges against Brett Pittsenbargar, a Texas-based external sales agent for Woodbridge Group of Companies LLC, and his wholly-owned alter ego company, for illegally selling Woodbridge securities and other securities in unregistered transactions to retail investors while acting as an unregistered broker. According to the complaint, Pittsenbargar was among Woodbridge's top revenue producers.
The SEC previously charged Woodbridge and its former owner, Robert H. Shapiro, and 19 of Woodbridge's other highest-earning unregistered brokers with allegedly stealing over a billion dollars from thousands of retail investors, many of them seniors, as part of a massive Ponzi scheme. In January 2019, a federal court in Florida ordered Woodbridge, its related companies, and Shapiro to pay a combined $1 billion for operating this Ponzi scheme. The SEC also charged Woodbridge's two former directors of investments for their roles in the scheme.
According to the SEC's complaint, from at least November 2012 to December 2016, Pittsenbargar and his alter-ego company, MGM Home Remodeling LLC f/k/a BP Financials, LLC d/b/a BP Financial & Tax Design Group (BP Financials), raised more than $18 million by selling Woodbridge securities in unregistered transactions to at least 45 retail investors located in at least four states. Pittsenbargar was not registered with the SEC and allegedly received approximately $1 million in transaction-based compensation.
The SEC's complaint, filed in the Central District of California, charges Pittsenbargar and BP Financials with violating the registration provisions of Sections 5(a) and 5(c) of the Securities Act of 1933 and Section 15(a)(1) of the Securities Exchange Act of 1934 and seeks disgorgement of ill-gotten gains, prejudgment interest, and financial penalties.
The SEC's investigation, which is continuing, has been conducted and supervised by Jason R. Berkowitz, Fernando Torres, Thierry Olivier Desmet, and Glenn Gordon. The litigation will be led by Christine Nestor and Stephanie N. Moot 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 Federal Bureau of Investigation, the Internal Revenue Service, Criminal Investigations, and the Texas State Securities Board.
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 Investor.gov website to check the backgrounds of people selling them investments to quickly identify whether they are registered professionals.