What You Need to Know
- A Marietta, Georgia, advisor was named in a complaint by the SEC, along with two entities he controls.
- The advisor had served as the CEO and president of RIA Southport Capital, one of those entities.
- He served as a broker for Oppenheimer from 2003 to 2016.
The Securities and Exchange Commission obtained a temporary restraining order and asset freeze on Tuesday against a Marietta, Georgia, advisor and Horizon Private Equity III, an entity he controls, to stop the $110 million Ponzi scheme that the SEC alleged they were operating, according to court documents.
The SEC was also granted its requests for expedited discovery and that Horizon and select assets owned by the advisor, John J. Woods, including his ownership stake in the RIA firm Livingston Group Asset Management, which operates as Southport Capital, be placed into receivership.
The SEC filed a complaint on Friday in U.S. District Court for the Northern District of Georgia against Woods, Horizon and Livingston/Southport, alleging the defendants raised more than $110 million from more than 400 investors in 20 states by offering and selling membership units in Horizon.
Woods, who served as a broker at Oppenheimer & Co. from 2003 to 2016, according to his report on the Financial Industry Regulatory Authority’s BrokerCheck website, was the principal officer at Livingston/Southport, serving as its CEO and president.
However, he was no longer listed as a member of the executive team on the firm’s website on Wednesday. Clay Parker, a partner who previously served as senior investment advisor, was instead listed as the Livingston/Southport CEO and president on Wednesday.
The SEC had also requested that a TRO be granted against Livingston/Southport. But that request was denied without prejudice by Judge Steven D. Grimberg, according to court documents.
Woods could not immediately be reached for comment and the company email address he previously had was no longer in use.
David Chaiken, one of the attorneys representing Woods and Horizon, told ThinkAdvisor: “We were pleased with the Court’s decision not to place Southport into receivership or restrain its assets, and per the Court’s directive, we are working with the SEC on a proposed order.”