Broker Allegedly Illegally Sold Over $23M in Woodbridge Securities
The US Securities and Exchange Commission (SEC) has filed civil charges against Charles Nilosek for acting as an unregistered broker and illegally selling Woodbridge securities to retail investors. The regulator said that Nilosek, who is based in Massachusetts, was one of the top revenue earners when it came to selling the unregistered investments from the Woodbridge Group of Companies.
The Woodbridge investments are tied to a $1.2B Ponzi scheme that ran from 2012 to 2017. Woodbridge and its 281 related companies are accused of bilking more than 8,400 investors, many of whom were elderly investors who lost their money investing in the company’s promissory notes and private placements. The customers were promised 5-8% in yearly returns and many used their retirement money to invest.
The SEC’s complaint said that Nilosek and his Position Benefits LLC sold over $23M in Woodbridge securities to more than 200 investors in at least four states between 9/2013 and 9/2015. He was paid over $1.4M in compensation. The regulator contends that Nilosek was never a registered broker nor was he ever registered with a brokerage firm.
The regulator added its case against him to an amended complaint that names others accused of acting as unregistered brokers, selling about $183M in Woodbridge securities to more than 2300 retail clients 4/2013 to 12/2017, and collectively making about $9.8M in commissions.
Four “Advisers” Who Sold Woodbridge Investments are Barred
Meanwhile, the SEC has barred four “advisers” for selling the unregistered Woodbridge securities. They are Claude Mosely of South Carolina, Randy Rondberg of Arizona, Marcus Bray of California, and Andrew Costa of Florida. According to the Commission, all of them were unlicensed when they sold the investments and each did so through their respective firms:
- Trager, LLC for Rondberg
- Costa Financial Insurance Services Corp. for Costa
- Security Financial for Mosely
- Bradford Solutions for Bray
Citing Rondberg, specifically, InvestmentNews reports that as an unregistered broker-dealer, he sold about $15.5M of unregistered Woodbridge promissory notes and several private placement fund offerings that came with multiple year terms, making about $918K in commissions in the process.
Regulators Go After Broker-Dealers and Woodbridge
The SEC and the Financial Industry Regulatory Authority (FINRA) have been going after brokerage firms and brokers that sold the Woodbridge investments to customers. FINRA even awarded $276K to one investor in an arbitration claim against Quest Capital Strategies for its allegedly inadequate supervision of broker Frank Dietrich, who sold the unregistered securities to the customer. FINRA barred Dietrich.
In 2018, Woodbridge and its related companies settled the SEC’s civil charges against them by consenting to pay more than $1B, which included $892M in disgorgement of ill-gotten gains. Recently, former Woodbridge CEO Robert Shapiro and ex-directors Dane Roseman and Ivan Acevedo were charged in criminal court over the fraud. Shapiro has already settled the SEC’s case against him.
Woodbridge Ponzi Fraud Cases
Our Woodbridge investor fraud lawyers represent investors seeking to pursue their losses sustained in the $1.2B Ponzi scam. Please contact Shepherd Smith Edwards and Kantas, LLP (SSEK Law Firm) today, and we can help you determine whether you have grounds for pursuing an investment fraud claim.
SSEK has a team of attorneys and consultants with more than 100 years of combined experience in the securities industry and securities law. We use that experience to help investors recover wrongful losses. All communications will be kept strictly confidential and your consultation will be done with no charge or obligation to you. Call or email us today.