As recently reported, the U.S. Securities & Exchange Commission (SEC) has accused the founder and former CEO of the Woodbridge Group of Companies, LLC (“Woodbridge”), Mr. Robert Shapiro, of defrauding more than 8,400 investors nationwide in an elaborate real-estate related Ponzi scheme. Specifically, the SEC has alleged that Mr. Shapiro purportedly utilized a “web of more than 275 Limited Liability Companies to conduct a massive Ponzi scheme raising more than $1.22 billion… through fraudulent unregistered securities offerings.” At this stage, Woodbridge is in the midst of Chapter 11 bankruptcy proceedings in the U.S. Bankruptcy Court for the District of Delaware (Case No. 17-12560-KJC) as investors wait to hopefully recoup a fraction of the money they invested in Woodbridge.
If you invested in Woodbridge upon the recommendation of former financial adviser Max Jacob Hechtman (“Hechtman”), you may be able to recover your losses through arbitration or litigation. According to SEC records, Mr. Hechtman (CRD No. 6709423) was formerly affiliated with the Registered Investment Advisor (RIA) firm AE Wealth Management, LLC (“AE Wealth”, IARD No. 282580) from October 5, 2016 until September 27, 2018. If you invested in any Woodbridge securities during this time frame, you may possess a viable legal claim to recover your losses against Mr. Hechtman and/or his former employer, AE Wealth.
Beginning as early as 2012, Woodbridge and its affiliate companies offered securities nationwide through a network of in-house promoters, as well as various licensed and unlicensed financial advisors. Woodbridge investments came in two primary forms: (1) “Units” consisting of subscription agreements for the purchase of an equity interest in one of Woodbridge’s seven Delaware limited liability companies, and (2) “Notes” or what have commonly been referred to as “First Position Commercial Mortgages” or “FPCMs” consisting of lending agreements underlying purported hard money loans on real estate deals.