The US Securities and Exchange Commission has filed civil charges against a number of companies and brokers who illegally sold Woodbridge Group of Companies securities to retail investors. Woodbridge, which filed for bankruptcy protection last year, its owner Robert H. Shapiro, and several others have since been charged with running a $1.2B Ponzi scam that defrauded nearly 8,500 investors. Many of their victims were older investors who together took almost $400M out of their IRA to invest in the securities.
Now, the SEC is charging 13 unregistered brokers that were among the top sellers of Woodbridge securities. Collectively, they allegedly sold over $350M in the unregistered securities to more than 4,400 investors. The regulator contends that the defendants promoted the Woodbridge securities as “safe” investments, making millions of dollars in commissions from the sales even though they were not registered brokers or even affiliated with a registered brokerage firm and should never have sold the Woodbridge investments to begin with. The brokers named in the SEC broker fraud case include:
• Robert S. Davis, Jr., the VP of Old Securities Financial Group
• Donald Anthony Mackenzie, the owner of the Texas-based corporation Old Security
• Jeffrey L. Wendel, the owner of Wendel Financial Network
• Randy T. Rondberg, the owner of Trager, LLC
• Richard Fritts, the owner of Fritts Financial
• Marcus Bradford Bray, the owner of Bradford Solutions
• David Knuth, the co-owner of Synergy
• Gregory W. Anderson, the owner of Balanced Financial
• Claude Steven Mosley, the owner of Security Financial, LLC
• Gregory A. Koch, the owner of Koch Insurance Brokers
• Aaron R. Andrew, a Supervisory Producer at Paramount Financial Services
• Jordan E. Goodman
• Alan H. New
The companies named as defendants are Live Abundant (Paramount Financial Services), Old Security Financial, Wendel Financial Network, Trager LLC, Fritts Financial, Bradford Solutions, Balanced Financial, Security Financial, Koch Insurance Brokers, and Synergy Investment Services.
Already, Goodman has settled the SEC charges against him. He will disgorge $2.9M with nearly $316K in prejudgment interest and a $100K penalty. Among the accusations against him was that he would go online and on the radio to endorse Woodbridge but did not disclose that he was making money from the sales of the securities. Goodman, despite settling, has not, however, denied or admitted to the allegations. Also settling without denying or admitting to the SEC’s claims are Knuth, Knew, and Synergy Investment Services. A court will determine how much they each will have to pay in disgorgement and penalties.
These latest allegations come just months after the SEC filed similar charges against four companies and five other unregistered brokers that sold Woodbridge securities to investors. Three of those people, Barry M. Kornfeld, Ferne Kornfeld, and Albert D. Klager have also settled. The Kornfelds will pay $3.69M of disgorgement, and over $690K in prejudgment interest, with Barry paying a penalty of $500K and Ferne one of about 150K. A third person, Albert D. Klager, will pay $1.36M of disgorgement, almost $279M in prejudgment interest, plus a $100K penalty.
Woodbridge Investor Fraud Lawyers
If you are an investor that suffered losses from purchasing Woodbridge Securities, our broker fraud lawyers at Shepherd Smith Edwards and Kantas, LLP (SSEK Law Firm) want to talk to you. You may have grounds for pursuing an investor fraud claim. Contact us today for your initial, free consultation. SSEK Law Firm represents investors nationwide.