Woodbridge Group Files for Bankruptcy Protection Amid Investigatin by the SEC
Woodbridge Group of Companies LLC, a high-end real estate developer, on December 4, 2017, filed for bankruptcy amid the departure of its chief executive and an investigation into potential securities fraud linked to $1 billion in investments. The upscale nature of the properties made investments in the company appear attractive. Woodbridge is also linked to over 200 different potential limited liability companies that handle their real estate assets. Woodbridge Wealth offers several financial products to their investors with the promise of a substantial return. Many of these portfolio options are related to mortgages and what Woodbridge calls second market annuities. The SEC investigation centers around the legitimacy and nature of these investments. The securities are believed to be unregistered.
The SEC is investigating it to determine whether the company has been operating as a fraud. The company’s president, Robert Shapiro, is also being investigated. The SEC is “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.” According to Woodbridge’s website, the group, Woodbridge Wealth, sells three types of investment: 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%. There is suspicion the investments may have been a Ponzi Scheme.
statement it’s cooperating with the investigation. Chief Executive Officer Robert Shapiro resigned, but will take on a consulting role as the Sherman Oaks, California-based company seeks to restructure $750 million in debt, according to the statement. He’ll get a monthly fee of $175,000, which will be paid to WFS Holding Co., an entity he controls, according to court papers.
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