Woodbridge Group of Companies LLC, a Los Angeles-based luxury real estate developer, has filed for bankruptcy amid the departure of its CEO and an investigation into a potential $1 billion securities fraud scheme.
Free Confidential Lawsuit Evaluation: If you or a loved one was an investor in the Woodbridge Group of Companies, LLC, you should contact our law firm immediately. You are entitled to immediate relief by filing a claim in the bankruptcy proceedings, and our lawyers can help.
Woodbridge Files for Bankruptcy Amid SEC Fraud Probe
December 4, 2017 – The Woodbridge Group bankruptcy filing cited “unforeseen costs associated with ongoing litigation and regulatory compliance,” according to the Wall Street Journal.
The U.S. Securities and Exchange Commission (SEC) has launched an investigation into whether the high-end real estate development firm defrauded clients who invested more than $1 billion. The agency also sought additional information on more than 200 limited liability companies Woodbridge formed, according to an October 31 SEC court filing.
Shapiro Resigns Amid Fraud Charges
Also on Monday, Woodbridge announced that its CEO Robert Shapiro had resigned from his position in exchange for a consulting role at the firm, according to Bloomberg. Shapiro will get a monthly fee of $175,000, which will be paid to WFS Holding Co., an entity he controls, court documents stated.
“Woodbridge has represented to investors that bona-fide third parties are borrowing money and repaying interest at a high rate, of which the investors in Woodbridge funds get a portion thereof,” the SEC filing said. “However, evidence obtained in our investigation reveals that many, if not all, of these LLCs may be Woodbridge affiliates with Shapiro as their manager.”
In a previous investigation, Shapiro was found to be the force behind Mercer Vine, a Los Angeles real estate agency that specializes in high-end homes and development property in Los Angeles County. Shapiro left that firm the same day he stepped down from Woodbridge.
How Does the Woodbridge Group Work?
Woodbridge Wealth (“The Group”) sells 3 types of investment, according to the firm’s website: first position commercial mortgages with an annual yield of 5%, secondary market annuities with above average, risk adjusted yields, and a commercial bridge loan fund that potentially returns 6%. However, FINRA contends that there is no broker-dealer named Woodbridge Wealth. If your broker recommended or sold to you Woodbridge Wealth, contact our lawyers today to learn more about your legal rights.
Violation of Pennsylvania Securities Law
The Pennsylvania Bureau of Securities Licensing, Compliance, and Examinations in April 2017 entered into an agreement (PDF) with Woodbridge Wealth to settle allegations of securities industry misconduct. According to court documents, Woodbridge was selling unregistered structured settlement products in Pennsylvania, in violation of the state’s securities regulations.
Proper registration is required to sell these types of products to retail investors, the bureau said. This is a major legal violation, and it puts investors at risk. To settle the charges, Woodbridge agreed to pay a $30,000 fine, but was not forced to admit any wrongdoing pertaining to the charges, as part of the deal.
Woodbridge “… will continue to cooperate fully and work with the SEC and state regulators toward resolution of any investigations,” said Marc Beilinson of Beilinson Advisory Group, who will serve as an independent manager. “We have a strong, independent management team in place and an institutional source of capital that should set Woodbridge on a path to emerge with the financial flexibility the Company needs to continue in operation.”
Do I Have a Woodbridge Group Real Estate Bankruptcy Lawsuit?
The Finance and Insurance Litigation Group at our law firm is an experienced team of trial lawyers that focus on the representation of plaintiffs in Woodbridge Group Lawsuits. We are handling individual litigation nationwide and currently accepting new fraud cases in all 50 states.
Free Case Evaluation: Again, if you were an investor in the Woodbridge Group of Companies, LLC, you should contact our law firm immediately. You are entitled to immediate relief by filing a claim in the bankruptcy proceedings, and our lawyers can help.