The Securities and Exchange Commission announced charges against an additional 13 individuals and 10 companies for unlawfully selling securities of the Woodbridge Group of Companies to retail investors.
Woodbridge collapsed into bankruptcy in December 2017, and the SEC previously charged the company, its owner and others with operating a $1.2 billion Ponzi scheme and charged five of the top Florida-based sales agents with securities and broker-dealer registration violations.
The 13 individuals charged were among Woodbridge’s top revenue producers, selling more than $350 million of its unregistered securities to more than 4,400 investors. According to the complaints, the defendants marketed Woodbridge’s securities as a “safe” and “secure” investment and reaped millions of dollars in commissions on their sales even though they were not registered as, or associated with, registered broker-dealers. The SEC also alleges that defendant Jordan Goodman, a self-described “media influencer,” touted Woodbridge without disclosing that he was paid to do so.
“The SEC has now charged 18 of Woodbridge’s highest-earning unregistered sales agents who sold more than $400 million of its securities to retail investors,” said Eric Bustillo, director of the SEC’s Miami Regional Office. “Our continuing investigation of Woodbridge seeks to hold those who aided this massive fraud accountable and to return funds to harmed investors.”
In its latest actions, the SEC is seeking court-ordered injunctions, return of allegedly ill-gotten gains with interest, and financial penalties. See here for a full list of the defendants.
SEC Charges California Advisor With Fraud
The Securities and Exchange Commission charged an investment advisor with misappropriating client funds and misleading his clients about how their money was invested and how their investments were performing.
The SEC’s complaint alleges that Craig Arsenault, based in Laguna Niguel, California, defrauded clients of his advisory firm, Atlas Capital Management Inc.
Arsenault persuaded several of his clients invest $5.7 million total in a company he controlled, ACT Global Investments.
According to the complaint, Arsenault solicited investments in ACT, telling his advisory clients that their funds would be used to make secured loans to doctors for the purpose of acquiring medical equipment. The complaint alleges that Arsenault and ACT used client funds instead to make unsecured loans to, for example, a used car dealership, and to acquire undeveloped real estate. As alleged in to the complaint, Arsenault then provided clients with deceptive account statements that made it appear as if these investments were generating substantial income when they were not.
In addition, Arsenault misappropriated and misused more than $1 million of client funds in ACT, according to the SEC.
Instead of investing the clients’ funds as he had promised, Arsenault used a substantial portion of client funds to pay himself directly, to lend himself money, to send to Atlas, or to reimburse himself for undocumented ACT expenses. All of these payments were without the knowledge or consent of his advisory clients.