Investors in Woodbridge Units or Notes, as further defined below, who purchased a Woodbridge investment based upon a recommendation by former financial advisor Alan Harold New (CRD# 2892508) may be able to recover losses through securities arbitration. Publicly available information through FINRA BrokerCheck indicates that Alan New was formerly affiliated with broker-dealer NYLife Securities LLC (“NYLife”) (CRD# 5167) in their Fort Wayne, IN office, from June 2004 – August 2016.

As recently reported, the Woodbridge Group of Companies, LLC (“Woodbridge”) and certain of its affiliated entities filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware (Case No. 17-12560-KJC) on December 4, 2017. Beginning as early as 2012, Woodbridge and its affiliates offered securities nationwide to numerous retail investors through a network of in-house promoters, unlicensed advisors, as well as various licensed financial advisors, including Mr. New. Woodbridge investments essentially came in two forms: (1) so-called “Units” that consisted of subscriptions agreements for the purchase of an equity interest in one of Woodbridge’s Delaware limited liability companies, and (2) “Notes” or what have commonly been referred to as “First Position Commercial Mortgages” or “FPCMs” that consisted of lending agreements underlying purported hard money loans on real estate deals.

As alleged by the SEC, Woodbridge and its owner and former CEO, Mr. Robert Shapiro, purportedly “used his web of more than 275 Limited Liability Companies to conduct a massive Ponzi scheme raising more than $1.22 billion from over 8,400 unsuspecting investors nationwide through fraudulent unregistered securities offerings.” According to Steven Peiken, Co-Director of the SEC’s Enforcement Division, the Woodbridge “[b]usiness model was a sham. The only way that Woodbridge was able to pay investors their dividends and interest payments was through the constant infusion of new investor money.”

As indicated through FINRA BrokerCheck, Alan New currently has five (5) pending customer disputes. Each of these disputes center on similar allegations concerning Mr. New’s alleged involvement in recommending “[u]nregistered and fraudulent investments in Woodbridge Mortgage Investment Fund.” Brokerage firms including NYLife have an affirmative obligation to ensure that their registered representatives are adequately supervised. Consequently, brokerage firms must take reasonable steps to ensure that their registered representatives follow all applicable securities rules and regulations, as well as adhere to the firm’s internal policies and procedures. In those instances when brokerage firms fail to adequately supervise their brokers, they may be held liable for losses sustained by investors.

Under FINRA Rule 3280, if a financial advisor wishes to consummate a private securities transaction, then he or she must first provide the firm with prior written notice, detailing the contemplated transaction. Such a transaction must first be approved by the firm. Furthermore, in the event that the transaction is not approved by the firm, then the broker cannot participate in the transaction.

The attorneys at Law Office of Christopher J. Gray, P.C. have significant experience representing investors in disputes involving broker misconduct, including claims concerning sales of risky, illiquid and opaque financial products. Investors may contact a securities arbitration attorney via the contact form on this website, by telephone at (866) 966-9598, or by e-mail at newcases@investorlawyers.net for a no-cost, confidential consultation.

If you invested in Woodbridge upon the recommendation of former financial advisor Frank Roland Dietrich (“Dietrich”), you may be able to recover your losses in arbitration before the Financial Industry Regulatory Authority (“FINRA”). According to FINRA BrokerCheck, a number of investors have already filed claims against Mr. Dietrich and his former employer, broker-dealer Quest Capital Strategies, Inc. (“Quest Capital”) (CRD# 16783). Publicly available information suggests that Quest Capital has disavowed any prior knowledge of Mr. Dietrich’s alleged business activity conducted away form the firm in selling purportedly non-approved Woodbridge investments. Nevertheless, Mr. Dietrich’s alleged “selling away” activity, to the extent it may have occurred while he was still affiliated with Quest Capital, may give rise to Quest Capital being held vicariously liable for the negligence and/or misconduct of its former employee.

As recently reported, the Woodbridge Group of Companies, LLC (“Woodbridge”) of Sherman Oaks, CA, and certain of its affiliated entities, filed for Chapter 11 bankruptcy protection on December 4, 2017 (U.S. Bankruptcy Court for the District of Delaware – Case No. 17-12560-KJC). The SEC has alleged that Woodbridge, through its owner and former CEO, Mr. Robert Shapiro, purportedly utilized “more than 275 Limited Liability Companies to conduct a massive Ponzi scheme raising more than $1.22 billion from over 8,400 unsuspecting investors nationwide through fraudulent unregistered securities offerings.”

Beginning as early as 2012, Woodbridge and its affiliates offered securities nationwide to numerous retail investors 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” that consisted of subscriptions 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.

Brokerage firms like Quest Capital have a duty to ensure that their registered representatives are adequately supervised. Consequently, brokerage firms must take reasonable steps to ensure that their brokers follow all applicable securities rules and regulations, as well as adhere to the firm’s internal policies and procedures. In those instances when brokerage firms fail to adequately supervise their registered representatives, they may be held liable for losses sustained by investors.

In the event that a financial advisor wishes to consummate a private securities transaction, then he or she must first provide the firm with prior written notice, detailing the contemplated transaction. Such a transaction must first be approved by the firm. If such a transaction is not approved by the firm, then the broker cannot participate in the transaction. In instances where a broker fails to notify the firm of the contemplated transaction, in the first instance, or proceeds with an unauthorized transaction in derogation of the firm’s directive to the contrary, then selling away has occurred, in direct violation of FINRA Rule 3280.

The attorneys at Law Office of Christopher J. Gray, P.C. have significant experience representing investors in disputes involving broker misconduct, including selling away claims, in addition to claims against brokerage firms for their failure to supervise. Investors may contact a securities arbitration attorney via the contact form on this website, by telephone at (866) 966-9598, or by e-mail at newcases@investorlawyers.net for a no-cost, confidential consultation.

As we have detailed in numerous blog posts, the Woodbridge Group of Companies, LLC (“Woodbridge”) and certain of its affiliated entities filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware (Case No. 17-12560-KJC) on December 4, 2017. From the outset of this Chapter 11 proceeding, investors in Woodbridge Notes (“Noteholders”) have taken the position that they hold secured, perfected liens in various real estate deals.

By way of background, beginning as early as July 2012, Woodbridge and its affiliates offered securities nationwide to investors in at least two forms: (1) subscription agreements for the purchase of equity interests or units in one of Woodbridge’s seven Delaware limited liability companies (“Units”); and, (2) lending agreements, some of which were referred to as “First Position Commercial Mortgage Notes,” “mezzanine loans,” “construction loans,” and “Co-Lending Opportunities” (collectively, “FPCMs”).

On March 27, 2018, the Debtors, the Unsecured Creditors Committee and the Ad Hoc Noteholders Committee all agreed on a plan of reorganization that was encapsulated in a Term Sheet filed with the Bankruptcy Court. However, the Term Sheet failed to address whether or not Woodbridge Noteholders who invested in FPCMs do, in fact, hold secured, perfected liens. Accordingly, on March 27^th a Woodbridge FPCM investor – retired 85 year old attorney Lisa La Rochelle – filed an adversary proceeding (the “Owlwood Complaint”) in an effort to resolve the looming question of whether some $800 million in FPCMs should be treated as secured debt for purposes of disposition of the Chapter 11 proceeding.

In opposition to the Debtors and Creditors’ Committees’ stance that Noteholders are unsecured because they neither hold the original promissory note on their collateral, nor do they possess filed UCC-1 financing statements, Ms. La Rochelle has argued that a California statute offers protection to Noteholders. Specifically, the Owlwood Complaint relies upon Section 10233.2 of the California Business and Professional Code, as interpreted by the 9^th Circuit Court of Appeals in In Re: First T.D. Investment, Inc., 253 F.3d 520 (9^th Cir. 2001). Under the holding of In Re FTD, Section 10233.2 is recognized as a consumer protection statute that enumerates certain requirements that will establish perfection, absent holding the underlying note or a filed UCC-1, as is the case with numerous Woodbridge Noteholders.

To begin, the borrower needs to be acting as a broker within the meaning of Section 10131 or 10131.1 of the California Business and Professional Code. Pursuant to 10131.1, the term real estate broker is defined as “a person who engages as a principal in the business of making loans or buying from, selling to, or exchanging with the public, real property sales contracts or promissory notes secured directly or collaterally by liens on real property, or who makes agreements with the public for the collection of payments or for the performance of services in connection with real property sales contracts or promissory notes secured directly or collaterally by liens on real property.”

Second, the statute mandates that the real estate broker has to have “…arranged a loan or sold a promissory note or any interest therein, and thereafter undertakes to service the promissory note on behalf of the lender or purchaser in accordance with Section 10233…” It is worth noting that the Ninth Circuit in In Re FTD used a very broad definition of “sold.” Third, the statute contemplates that the real estate broker undertakes to service the promissory note on behalf of the lender. In the Owlwood Complaint, Ms. La Rochelle has argued that Woodbridge was clearly servicing the note between the respective investment fund and the property company within the meaning of Section 10233. The Secured Noteholders received direct communications and checks from the Woodbridge Group. Further, the Secured Noteholders received monthly interest payments and statements from the Debtors.

Through Ms. La Rochelle’s Motion papers and the supporting Owlwood Complaint, Woodbridge Noteholders seek to terminate the Debtors’ exclusive period and be afforded the right to file their own completing plan of reorganization. As argued by Ms. La Rochelle:

“… this Court should allow the Secured Noteholders to explore filing their own plan. It is clear that certain California properties such as Owlwood hold the greatest value in this case and may provide a basis for significant recovery. To deny California noteholders the right to realize on their specific collateral, which they relied on at the outset when making the investment decision, would be a miscarriage of justice.”

Investors in Woodbridge FPCMs, Units and other securities may be able to recover investment losses through arbitration or litigation. Investors may contact a securities arbitration attorney at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.

On March 18, 2016, the Securities Commissioner of the State of Texas (“Securities Commissioner”) entered a Cease and Desist Order (“Order”) against Woodbridge Mortgage Investment Fund 3, LLC (“Woodbridge 3” or “Respondent”). Respondent Woodbridge 3 is a Delaware-organized limited liability company formed in or around 2014. Woodbridge 3 is one of a number of mortgage funds offered by the Woodbridge Group of Companies, LLC (“Woodbridge”), the successor firm to Woodbridge Structured Funding, LLC. Woodbridge is headquartered in Sherman Oaks, CA, and its principal and controlling person is Robert H. Shapiro (“Shapiro”).

In connection with the Securities Commissioner’s Order, State of Texas securities regulators made the following findings of fact concerning their investigation into Woodbridge 3:

• The Bureau determined that Respondents Woodbridge 3 and Shapiro offered and sold “First Position Commercial Mortgages” (“FPCMs” or “The Note Program”) to investors in Texas that fell within the definition of a security;
• On July 17, 2015, the Securities Commissioner entered an Emergency Cease and Desist Order (No. ENF-15-CDO-1740) (“Emergency Order”) against Respondents, as well as other parties;
• On or about August 20, 2015, Respondents Woodbridge and Shapiro filed a request to modify or set aside the Emergency Order;
• By virtue of entering into the March 18, 2016 Order, Respondents withdrew their request for an administrative hearing “… as the parties [had] settled all matters in controversy.”

Pursuant to the Securities Commissioner’s findings, it was concluded that the Note Program constituted investments in securities, as defined by Section 4.1 of the Texas Securities Act (the “Act”). Furthermore, the Securities Commissioner concluded that Respondents Woodbridge and Shapiro had allegedly violated Section 7 of the Act by “… offering securities for sale in Texas at a time when the securities were not registered with the Securities Commissioner.” Based upon these alleged violations, the Securities Commissioner ordered that Respondents immediately cease and desist from offering for sale unregistered securities through its Note Program to Texas residents under the Act, until such time as the Note Program became registered in Texas and sold “… pursuant to an exemption from registration under the Texas Securities Act.”

In addition to regulatory scrutiny in Texas, Woodbridge has been subject to investigations by state securities regulators in: Arizona, Colorado, Massachusetts, Michigan, and Pennsylvania. Included among the various Woodbridge entities or mortgage funds are the following:

• WMF Management, LLC;
• Woodbridge Group of Companies, LLC;
• Woodbridge Mortgage Investment Fund 1, LLC;
• Woodbridge Mortgage Investment Fund 2, LLC;
• Woodbridge Mortgage Investment Fund 3, LLC;
• Woodbridge Mortgage Investment Fund 3A, LLC;
• Woodbridge Mortgage Investment Fund 4, LLC;
• Woodbridge Mortgage Investment Fund PA, LLC;
• Woodbridge Group of Companies, LLC (d/b/a Woodbridge Wealth).

Among the many risks associated with investing in securities through a private placement is the potential for fraud or related misconduct. Pursuant to applicable federal securities laws, as well as corresponding state “Blue Sky” laws governing securities — in order for unregistered securities to be sold in a compliant manner — in nearly all instances an exemption to registration must apply. With respect to securities offerings under the Note Program through Woodbridge 3 to Texas investors, it does not appear that offerings to Texas investors were recommended to investors as exempt securities through a permissible private placement offering.

If you have purchased any of the Woodbridge Notes and have suffered losses, you may be able to recover these losses in FINRA arbitration if the investment was based on a recommendation from a stockbroker or financial advisor that lacked a reasonable basis. Investors may contact a securities arbitration attorney at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.

As recently reported, the Woodbridge Group of Companies, LLC (“Woodbridge”) of Sherman Oaks, CA, continue to face considerable regulatory scrutiny in connection with allegations of offering and selling unregistered securities. For the past year on the federal level, the Securities and Exchange Commission (“SEC”) has been conducting an investigation into Woodbridge. In that regard, according to a publicly available court filing, the SEC “[i]s investigating the offer and sale of unregistered securities, the sale of securities by unregistered brokers and the commission of fraud in connection with the offer, purchase and sale of securities” by Woodbridge and its affiliated companies and agents.

Concurrently at the state level, Woodbridge has been the subject of investigations by various state securities regulators in Arizona, Texas, Massachusetts, Pennsylvania, and Michigan (as well as recent inquiries made by the Colorado Division of Securities). Several of these investigations have resulted in regulators issuing cease-and-desist orders, requiring Woodbridge to stop offering and/or selling unregistered securities, and furthermore, to stop otherwise violating applicable securities laws.

For example, on or about April 24, 2017, the Commonwealth of Pennsylvania Department of Banking and Securities, Bureau of Securities Compliance (the “Bureau”) entered into a Consent Agreement and Order (“Consent Order”) with Woodbridge. As part of the Consent Order, Respondent Woodbridge — without admitting or denying any of the allegations raised by the Bureau — agreed to pay an administrative assessment of $30,000, and additionally agreed to adhere to Pennsylvania’s state securities laws which prohibit, among other things, selling unregistered securities that are not exempt from registration.

The Bureau has also focused its attention on various individuals who allegedly sold certain Woodbridge mortgage funds (“Woodbridge Funds”), often marketed as First Position Commercial Mortgages (“FPCMs”), to Pennsylvania investors. For example, from August – October 2017, publicly available information demonstrates that the Bureau has issued Orders to Show Cause against the following four (4) individual Respondents in connection with their purportedly selling certain Woodbridge Funds to Pennsylvania residents:

• August 8, 2017 – an Order to Show Cause was issued by the Bureau against Dennis Drake (“Drake”). The Bureau has alleged that Mr. Drake offered and sold interests in a certain Woodbridge Fund(s) for an aggregate amount of at least $75,000 to at least one Pennsylvania investor;
• August 8, 2017 – an Order to Show Cause was issued by the Bureau against Elizabeth J. Haskell d/b/a Iron Will Advisory Group (“Haskell”). The Bureau has alleged that Ms. Haskell offered and sold interests in a certain Woodbridge Fund(s) for an aggregate amount of at least $350,000 to at least one Pennsylvania investor;
• October 13, 2017 – an Order to Show Cause was issued by the Bureau against Greg A. Koch d/b/a Koch Financial Group (“Koch”). The Bureau has alleged that Mr. Koch offered and sold interests in a certain Woodbridge Fund(s) for an aggregate amount of at least $710,000 to at least three Pennsylvania investors;
• October 18, 2017 – an Order to Show Cause was issued by the Bureau against Michael Kandravi d/b/a Explore Financial Group (“Kandravi”). The Bureau has alleged that Mr. Kandravi offered and sold interests in a certain Woodbridge Fund(s) for an aggregate amount of at least $475,000 to Pennsylvania investors.

The Bureau has alleged that the above-named individual Respondents engaged in activity in Pennsylvania that resulted in a “[w]illful violation of Section 301(a)” of the Pennsylvania Securities Act of 1972 (the “Act”), based upon their purportedly selling unregistered securities that were not exempt from registration.

At this time, Woodbridge reportedly continues to sell securities. Some of the issuers of Woodbridge securities (and not necessarily the same Woodbridge Funds subject to the various aforementioned Pennsylvania regulatory proceedings) include the following entities:

• WMF Management, LLC;
• Woodbridge Group of Companies, LLC;
• Woodbridge Mortgage Investment Fund 1, LLC;
• Woodbridge Mortgage Investment Fund 2, LLC;
• Woodbridge Mortgage Investment Fund 3, LLC;
• Woodbridge Mortgage Investment Fund 3A, LLC
• Woodbridge Mortgage Investment Fund 4, LLC;
• Woodbridge Mortgage Investment Fund PA, LLC;
• Woodbridge Group of Companies, LLC (d/b/a Woodbridge Wealth).

Financial advisors, and by extension their brokerage firm, have a duty to perform adequate due diligence on any investment recommended to customers, including private placement offerings pursuant to Regulation D. In addition, financial advisors have a duty to disclose the risks associated with any investment, and moreover, to conduct a suitability analysis to determine if an investment meets an investor’s stated investment objectives and associated risk profile.

If you have invested in any of the Woodbridge Funds, or otherwise purchased a First Position Commercial Mortgage through investing in a Woodbridge promissory note based on the advice of a stockbroker or financial advisor, you may be able to recover investment losses in FINRA arbitration. Investors may contact a securities arbitration attorney at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.

On May 4, 2015, the Commonwealth of Massachusetts Securities Division (“Division”) entered a Cease and Desist Order (“Order”) against certain Woodbridge Mortgage Investment Funds. With respect to the Order, these mortgage funds — which are offered by Woodbridge Wealth (“Woodbridge”) of Sherman Oaks, CA — include: Woodbridge Mortgage Investment Fund 1, LLC, Woodbridge Mortgage Investment Fund 2, LLC, and Woodbridge Mortgage Investment Fund 3, LLC (collectively, the “Woodbridge Funds”). These Woodbridge Funds, and other similar fund iterations, have been offered nationwide by Woodbridge through a network comprised primarily of independent broker-dealers and financial advisors.

Through its findings of fact, the Division noted that the Woodbridge Funds, all Delaware limited liability companies, sought to “[r]aise money from individuals in Massachusetts, by offering and selling ‘First Position Commercial Mortgages…’” Significantly, the Division determined that Woodbridge’s First Position Commercial Mortgages (“FPCMs”) were not registered as securities in either Massachusetts or on the federal level, nor were these FPCMs exempt from registration. In nearly all instances, in order to recommend an investment in a security, the issuer and/or broker or promoter soliciting the investment must either register the security, or seek exemption from registration (e.g., exemption through Regulation D via private placement).

The Order indicated that in response to a Division subpoena, “[W]oodbridge identified 144 Massachusetts residents who invested in [FPCMs] between January 1, 2012 to present. The 144 Massachusetts Investors reside in cities and towns across the Commonwealth, including Springfield, Worcester, Gloucester, Truro, Plymouth, Dorchester, and Boston.” Finally, the Division determined that Charles N. Nilosek, a resident of Plymouth, MA, was promoting and selling FPCMs through his two business entities, Position Benefits, LLC and SHP Financial LLC. Of concern, the Division noted that Mr. Nilosek was not registered in any capacity with the Division, the SEC, or FINRA. Further, Position Benefits, LLC was not registered in any capacity with the Division, the SEC, or FINRA.

There are numerous risks associated with investing in unregistered securities (typically offered through an exempt private placement). Further, there are certain risks inherent to investing in real estate and debt obligations, such as hard money loans, encumbering real estate. With regard to these risks, the Division alleged the following potential risk factors specific to Woodbridge FPCMs:

• DISCLOSURE: “Massachusetts Investors may have been uninformed of the potential risks typically associated with real estate transactions…”
• POTENTIAL DEFAULT: “… if Woodbridge were to become bankrupt or default on its obligation to pay a Massachusetts Investors, the Massachusetts Investor may have to file a lawsuit against Woodbridge to recoup owed payments….”
• VALUATION OF UNDERLYING COLLATERAL: “Massachusetts Investors rely on Woodbridge to properly value the property serving as collateral on the loan… including the potential for depreciation, to file the Massachusetts Investor’s security interest on local land records, and to obtain title insurance….”
• HARD MONEY LOAN COMPLIANCE: “Documentation of hard money loans… involves compliance with numerous state and federal regulations. Failure to comply with these regulations may invalidate the security interest claimed by Woodbridge….”

In connection with the Order, the Division charged that the Respondent Woodbridge Funds had violated Section 301 of the Massachusetts Uniform Securities Act, making it unlawful for any person to “[o]ffer or sell any security in the commonwealth unless: (1) the security is registered… (2) the security or transaction is exempted… or (3) the security is a federal covered security.” In rendering its Order, the Division required that the Woodbridge Funds cease and desist from any further selling of unregistered or non-exempt securities in Massachusetts, and further, that Woodbridge pay a $250,000 fine.

If you have invested in any of the Woodbridge Funds, or otherwise purchased a FPCM through investing in a Woodbridge promissory note private placement, you may be able to recover investment losses in FINRA arbitration. To find out more about your legal rights and options, contact a securities arbitration attorney at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.

The U.S. Securities and Exchange Commission (“SEC”) obtained an order on September 21, 2017 requiring the Woodbridge Group of Companies LLC (“Woodbridge”), of Sherman Oaks, California, to produce the documents of several company executives and employees, including the President and CEO. This order reportedly relates to an SEC investigation of Woodbridge.

The SEC is reportedly investigating whether Woodbridge and others have violated or are violating the antifraud, broker-dealer, and securities registration provisions of the federal securities laws in connection with Woodbridge’s receipt of more than $1 billion of investor funds. According to the SEC’s application and supporting papers filed in federal court in Miami on July 17, 2017, investors from around the country may have been affected.

On January 31, 2017, in furtherance of the SEC’s probe into Woodbridge, SEC staff in the Miami Regional Office reportedly served Woodbridge with a subpoena seeking the production of electronic communications that the company maintained relating to Woodbridge’s business operations, as well as other documents. Court papers filed by the SEC allege that the company has failed to produce any relevant communications in response to the subpoena, including those of three high-level Woodbridge officials, despite being legally required to make the production. The Court overruled Woodbridge’s objections and ordered the documents produced.

Woodbridge’s entities or mortgage funds (which are not necessarily subject to the Court order referenced above) include the following:

• WMF Management, LLC;
• Woodbridge Group of Companies, LLC;
• Woodbridge Mortgage Investment Fund 1, LLC;
• Woodbridge Mortgage Investment Fund 2, LLC;
• Woodbridge Mortgage Investment Fund 3, LLC;
• Woodbridge Mortgage Investment Fund 4, LLC;
• Woodbridge Mortgage Investment Fund PA, LLC;
• Woodbridge Group of Companies, LLC (d/b/a Woodbridge Wealth)

Among the many risks associated with investing in securities through a private placement is the potential for fraud or related misconduct. As described above, in order for unregistered securities to be sold in compliance with federal and applicable state securities laws, in nearly all instances an exemption to registration must apply. With respect to Woodbridge, it does not appear that the various fund offerings were recommended to investors as exempt securities through a permissible private placement offering.

If you have purchased any of the Woodbridge Notes and have suffered losses, you may be able to recover these losses in FINRA arbitration. To find out more about your legal rights and options, contact a securities arbitration attorney at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.

As recently reported, the Colorado Division of Securities (“Division”) is reviewing Woodbridge Mortgage Investment Funds 1, 2, 3, and 3A (collectively, the “Woodbridge Funds”) and related entities in connection with possible sales of unregistered securities. The Woodbridge Funds are offered by Woodbridge Wealth of Sherman Oaks, CA, through a nationwide network comprised primarily of independent broker-dealers and financial advisors. In addition to its investigation into the Woodbridge Funds, the Division is reportedly also conducting a parallel investigation into other individual named Respondents, including James Campbell, Jr. of Woodland Park, CO, Timothy McGuire of Highlands Ranch, CO, and Ronald Caskey of Firestone, CO.

The Division is focused on possible Colorado securities violations stemming from the alleged sale of unregistered securities (that were not exempt from registration), the alleged solicitation of investments in the Woodbridge Funds by unlicensed representatives, as well as alleged fraudulent statements and omissions of material fact concerning sales of the Woodbridge Funds to Colorado investors. The Division has alleged that the named Respondents — Messrs. Campbell, McGuire and Caskey — have raised approximately $57 million in investor capital from approximately 450 Colorado residents, and further, continue to solicit and advertise to potential investors through both online and radio advertisements. Of note, Ronald Caskey bills himself as a “finance professional” on his website, with a focus on retirement planning. Mr. Caskey hosts the Ron Caskey Radio Show and Bible Views Radio Show on stations in Denver, CO, Colorado Springs, CO, in addition to Evansville, IN.

The Division is reportedly reviewing marketing so-called “First Position Commercial Mortgages” (or “FPCMs”) to various investors through issuing promissory notes in exchange for investments that backed certain hard money loans secured by commercial real estate. The Woodbridge Funds allegedly hired Messrs. Campbell, McGuire and Caskey as sales agents in Colorado, despite the fact that none of these named Respondents were/are licensed to solicit or sell securities. Moreover, the Division has alleged that the FPCM’s, although secured by notes and thus falling within the definition of a security, are neither registered as a security, nor exempt from registration. Other allegations concerning reported sales of unregistered securities by Woodbridge are reportedly being reviewed by state regulators in Massachusetts, Texas, and Arizona.

In reviewing Woodbridge, the Division has reportedly focused on the lack of proper registration (of the FPCMs as securities), lack of proper licensure of the named Respondents, qualification of the fund managers of the Woodbridge Funds, and the ability of the respective funds to pay back investors in the event of a default(s) on an underlying commercial loan(s).

Attorneys at Law Office of Christopher J. Gray have significant experience handling cases concerning unregistered securities and private placements. If you have invested in any of the Woodbridge Funds, or otherwise purchased a First Position Commercial Mortgage through investing in a Woodbridge promissory note, from a FINRA-registered stockbroker or financial advisor, or were steered into making such an investment by a stockbroker or financial advisor, you may be able to recover investment losses in FINRA arbitration. To find out more about your legal rights and options, contact a securities arbitration attorney at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.