Securities Fraud Blog
An Atlanta, Georgia area investment adviser, John Woods, was recently sentenced to 8 years in prison for his role in operating a ponzi scheme. Operating over a staggering 13-year period, Woods defrauded more than 400 individuals, including retirees, seniors, and military veterans, resulting in a loss exceeding $49 million. Under the guise of his fund, “Horizon Private Equity,” Woods promised lucrative returns of six to seven percent to potential investors, claiming minimal risk and a diverse portfolio. However, investigations revealed that the money collected from new investors was used to pay returns to earlier investors, constituting a classic Ponzi scheme.
The case underscores the importance of regulatory vigilance in the investment industry. Despite assurances of safety and profitability, Woods’s actions demonstrated a flagrant abuse of trust, ultimately causing financial ruin to hundreds of victims across 20 different states.
Investment Advisers are fiduciaries, and as such they owe their customers duties of care and loyalty, both of which were flagrantly breached in this situation. Mr. Woods was a longtime investment adviser representative at Oppenheimer & Co., Inc.
Although Investment Advisory firms and brokerage firms (Broker-Dealers) often claim they are not legally responsible for the unauthorized actions of their advisers, the law of most states holds otherwise. Firms can be legally responsible for the actions of their agents even if the agents acted solely for their own purposes and the firms received no compensation for the wrongful acts. Furthermore federal and state securities laws hold “control persons” liable for agents under their control, and firms further may be liable for breaches of their duties to supervise their agents.
If you believe you were the victim of a ponzi scheme or other fraudulent actions of your investment advisor, please contact securities fraud attorney Scott Greco for a free consultation about your potential case. Greco & Greco has decades of experience representing investors across the country for similar situations.