Former Georgia Financial Advisor Allegedly Ran Ponzi Scheme Through Southport Capital
On August 20, 2021, the Securities and Exchange Commission (SEC) filed an emergency action seeking to stop a $110 million Ponzi scheme allegedly operated by ex-Oppenheimer stockbroker, John Justin Woods.
The fraud, involving Horizon Private Equity III, LLC was run through Woods’ registered investment advisor Livingston Group Asset Management Company, (doing business as Southport Capital). On August 24, 2021, the United States District Court for the Northern District of Georgia issued a temporary restraining order and asset freeze against Woods and Horizon.
Woods, Southport, and Horizon are accused of raising over $110 million from more than 400 investors in 20 states. Many of the victims are older retirees.
Part of this took place while Woods was an Oppenheimer registered representative from 2008 to 2016, during which time he allegedly involved customers from the firm in his scam. His brother Jim Woods is also accused of bringing the brokerage firm’s customers into the Horizon Ponzi fraud. Although John Woods was fired from Southport on August 23, 2021, James Woods currently remains a Southport investment advisor.
Our brokerage firm negligence lawyers at Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyers.com) are speaking to Oppenheimer & Co. customers who suffered losses in Horizon Private Equity III. Contact us at (800) 259-9010 today.
Horizon Private Equity III Investors Were Promised Safety, Fixed Returns
According to the SEC’s complaint, Horizon investors were told that the investment fund was safe and low-risk, their money would be used for different activities, and they would receive a fixed rate of return that would garner a 6% to 7% yearly return.
They also were reassured that they could get their principal back sans penalty following a short period of waiting. Instead, Horizon never made any money from real investments, and a significant percentage of supposed “returns” paid to earlier investors came from the money paid by newer investors to join.
The SEC said that despite raising $110M from investors, Horizon Private Equity III now has less than $16M in assets.
Oppenheimer Sued in Class Action Lawsuit and FINRA Arbitration
On August 31, 2021, investors filed a class action securities lawsuit against Oppenheimer for the losses they sustained in the alleged $110M Ponzi scheme.
The plaintiffs contend that the broker-dealer disregarded warning signs that Woods was bilking them, which allowed him to transfer millions of dollars of their money. The firm is accused of allowing Woods to quietly resign while failing to notify law enforcement.
Also on the same day, investors filed a FINRA arbitration claim against Oppenheimer for the losses they sustained in the Horizon Private Equity III scheme. The claimants are seeking $1.4M in damages. John Woods was registered in the industry for 27 years. Previously, he was a broker for CIBC World Markets and Lehman Brothers in New York.
Seasoned FINRA Arbitration Lawyers
If you are a Horizon Private Equity III investor seeking to recover your investment losses, your best chance of financial recovery is to file a FINRA arbitration case against Oppenheimer. This is not the type of securities claim that you want to pursue without knowledgeable FINRA arbitration attorneys by your side.