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Nurse practitioner joins Northern | Mt.Ethereal Information

An alleged $110 million Ponzi scheme primarily based in Georgia and New York — however with affect reaching all the best way to Mount Ethereal — took one other step towards decision earlier this month for a few of its victims.

Oppenheimer & Co., a New York-based brokerage and funding financial institution, was ordered to pay almost $37 million in damages to 11 traders who misplaced cash within the scheme, allegedly performed by two corporations below the management of John Woods, a Marietta, Georgia resident.

Woods, a long-time dealer with Oppenheimer, had controlling pursuits in two different funding corporations: Horizon Personal Fairness, III LLC, and Livingston Group Asset Administration Firm, doing enterprise as Southport Capital.

Southport Capital had an workplace in Mount Ethereal, though it closed quickly after the Securities and Alternate Fee (SEC) took motion towards Woods and his corporations in August 2021. Nobody from the native agency acknowledged requests from The Mount Ethereal Information for remark or data , however on the time of the SEC’s motion, Woods was listed because the agency’s companion and senior funding advisor. Clay Parker was listed as president and CEO.

Based on the SEC’s unique criticism, filed in the USA District Courtroom for the Northern District of Georgia in August 2021, the defendants raised greater than $110 million from greater than 400 traders in 20 states by providing and promoting membership models in Horizon.

Woods, Southport, and different Southport funding advisers allegedly advised traders – together with many aged retirees who feared the volatility of the inventory market – that their Horizon investments had been protected and would pay a hard and fast price of return, and that traders may get their principal again with out penalty after a brief ready interval, in response to the SEC submitting.

Based on the criticism, nonetheless, these statements had been false and deceptive: Horizon didn’t earn any important earnings from reputable investments, and a big proportion of purported “returns” to earlier traders had been merely paid out of recent investor cash. The criticism additionally alleges that Woods repeatedly lied to the SEC throughout regulatory examinations of Southport.

“Traders felt snug investing in Horizon largely due to their relationships with advisers at Southport,” mentioned Nekia Hackworth Jones, director of the SEC’s Atlanta Regional Workplace. “As alleged within the criticism, Woods and Southport preyed upon their purchasers’ fears of dropping their hard-earned financial savings and satisfied them to put tens of millions of {dollars} right into a Ponzi scheme by falsely promising them a protected funding with regular returns.”

One other SEC submitting, from June 10 of this yr, struck nearer to residence for space traders. That submitting, in US District Courtroom in Atlanta, pointed the finger at three extra people, together with a Mount Ethereal resident.

Penny Flippen, 59 on the time of submitting, of Mount Ethereal; Britt Wright, 49 on the time of submitting, of Pfafftown, and Michael Mooney, 52 on the time of submitting, of Sarasota, Florida, had been all implicated within the criticism. The three are alleged to have suggested space traders to place a collective $62 million within the Horizon fund. Based on that June 10 submitting, the three are alleged to have advised purchasers the cash could be invested in protected securities similar to authorities bonds, and would pay a assured 6% to eight% return whereas posing no danger to the precept.

“…Horizon III was solely in a position to pay the assured returns to current traders by elevating and utilizing new investor cash,” that criticism alleges. “Horizon III didn’t earn any important earnings from reputable investments; as a substitute, a really massive proportion of purported ‘returns’ to earlier traders had been merely paid out of recent investor cash.”

The three had been charged with a number of violations of federal securities legal guidelines, the SEC acknowledged. That submitting has but to be resolved.

Georgia Case

The newest motion, taken this month and settled by an arbitration panel in Atlanta on Sept. 5, orders Oppenheimer to pay $36.75 million to 13 claimants as a part of the case. That award covers the cash they allegedly misplaced, court docket and submitting charges, in addition to treble damages in some case, elevating their award to as a lot as 3 times the cash they misplaced.

Based on an earlier criticism filed on their behalf in Georgia, Woods labored as an Oppenheimer funding advisor whereas allegedly working his Ponzi scheme, funneling prospects—and their cash—from Oppenheimer into his Horizon fund.

“Claimants are amongst greater than 300 individuals victimized by the $110 million scheme,” the submitting, by legal professional John Chapman of Chapman – Albin LLC, alleged. “The SEC not too long ago filed a criticism towards Horizon and Woods and froze the Horizon fund and its belongings. The SEC’s criticism alleges that Claimants have misplaced all, or considerably all, of their invested principal in Horizon. Respondent Oppenheimer failed completely to discharge its duties from him. Claimants have suffered the results of Respondent’s failures,” the submitting mentioned in in search of the damages.

Within the Georgia case, in response to court docket filings there, a number of of the victims had been led to consider Horizon was an funding automobile authorised by Oppenheimer, and a part of Oppenheimer’s portfolio of funding funds.

“In any respect related instances, Oppenheimer employed, held the securities license of, and was duty-bound to oversee the securities-related actions of its registered consultant John Woods,” the Atlanta submitting alleged in making the case for Oppenheimer to repay losses suffered by purchasers there. “Oppenheimer’s lax supervisory construction, through which brokers basically supervise themselves, has led…Oppenheimer to 97 regulatory actions and 173 arbitrations together with ones involving failing to oversee registered representatives’ exterior enterprise actions and personal securities transactions, amongst others,” Chapman mentioned in his filings .

Although Woods left Oppenheimer in December 2016, the court docket submitting alleges Oppenheimer knew of his wrongdoing, and was complicit in hiding that from regulators.

“In December 2016, absolutely conscious of the quite a few securities legislation violations happening in its Atlanta, Georgia workplace, Oppenheimer sought to hide the Horizon scheme from the regulators and the investing public by permitting Woods to quietly resign from Oppenheimer with out reporting the wrongdoing to regulators and the investing public, as required by legislation. This enabled Woods to proceed elevating cash from unsuspecting traders, permitting the Ponzi scheme to proceed for a lot of extra years, till August 2021,” in response to the September submitting.

The arbitrators dominated in favor of the Georgia plaintiffs, with a prolonged define of restitution and penalty funds to every of the victims, totaling almost $37 million.

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