SEC Charges Five Florida-Based Unregistered Brokers with Selling Fraudulent Woodbridge Group Financial Products
On August 20th, 2018, the Securities and Exchange Commission (SEC) announced investment fraud charges against five Florida residents:
- Barry Kornfeld of Parkland, FL;
- Ferne E. Kornfeld of Parkland, FL;
- Andrew G. Costa of Fort Lauderdale, FL;
- Albert D. Klager of Vero Beach, FL; and
- Lynette M. Robbins of The Villages, FL.
According to the SEC, these individuals collectively sold more than $240 million worth of unregistered Woodbridge Wealth Group securities to everyday retail investors. In December of 2017, the Woodbridge Group of companies filed for bankruptcy protection after being exposed as a massive Ponzi scheme. Here, our dedicated Miami financial advisor fraud attorneys review the allegations raised by the SEC against these unregistered brokers.
SEC Complaint: Unlawful Sale of Fraudulent Woodbridge Group Securities
Woodbridge Group Securities Were Pushed on Vulnerable Investors
In its complaints (Kornfeld et al and Robbins), the SEC contends that the defendants in this case used a wide range of experienced marketing and sales techniques to push Woodbridge Group financial products on investors. These sales occurred between April of 2013 and December of 2017. The brokers implicated in this case touted the Woodbridge Group securities as being ‘safe and secure’. In reality, these securities were anything but safe. Unfortunately, many of the investors that were targeted were elderly. They were encouraged to put their retirement savings into fraudulent Woodbridge financial products.
Unregistered Brokers
None of the five Florida-based individuals implicated in this investigation held an active securities license while they were offering Woodbridge Group financial products. On the contrary, Mr. Kornfeld has previously been barred from the securities industry by the Financial Industry Regulatory Authority (FINRA). The other four individuals never held a securities license at all. Unregistered brokers cannot sell securities to retail investors. In all, the SEC alleges that these five individuals collectively pocketed nearly $6 million in unlawful commissions and fees.
The Woodbridge Group Was a Ponzi Scheme
Sadly, the securities being sold by these unregistered brokers were fraudulent. In late 2017, the SEC charged the operators of the Woodbridge Group with operating a $1.2 billion Ponzi scheme.
Many Florida investors were affected by the Woodbridge Ponzi scheme. The company was originally headquartered in Boca Raton, FL, and federal regulators believe that more than 8,000 investors were victimized.
As these investment fraud charges show, the perpetrators of the Woodbridge Group Ponzi scheme got a considerable amount of help from unscrupulous brokers (both registered and unregistered) who carelessly and recklessly pushed these toxic securities on innocent investors.
Get Help From Our Miami Securities Fraud Lawyers Today
At Carlson & Associates, P.A., our trial law firm is committed to protecting the rights and interests of investors. If you lost money investing in Woodbridge Group financial products, you may be eligible to recover compensation. To set up a free review of your claim, please reach out to us today by calling (305) 372-9700. We represent investors all over South Florida, including in Miami, West Palm Beach, Miami Beach, Fort Lauderdale, Jupiter, and Miramar.
Resources:
sec.gov/news/press-release/2018-157
sec.gov/news/press-release/2017-235
sec.gov/litigation/complaints/2018/comp-pr2018-157-1.pdf
sec.gov/litigation/complaints/2018/comp-pr2018-157-2.pdf
