US SEC Charges Georgia Resident with Operating a $110 Million Ponzi Scheme
The US Securities and Exchange Commission (SEC) announced on Wednesday that it has obtained an emergency relief in a millionaire Ponzi scheme case and filed charges against an investment adviser involved in the saga. According to the press release, the watchdog filed an emergency action to stop a Ponzi scheme allegedly operated by Marietta, Georgia resident John Woods and two entities he controls: a registered investment adviser Livingston Group Asset Management Company, Southport Capital (Southport), and investment fund Horizon Private Equity, III LLC (Horizon).
Yesterday, the US District Court for the Northern District of Georgia granted the SEC a temporary restraining order to freeze the defendants’ assets, accused of raising over $110 million fraudulently from over 400 investors in 20 states. The investment product offered by them were memberships units in Horizon.
“Woods, Southport, and other Southport investment adviser representatives allegedly told investors – including many elderly retirees – that their Horizon investments were safe, would be used for different investment activities, would pay a fixed rate of return, and that investors could get their principal back without penalty after a short waiting period,” the SEC noted. However, the claims made throughout the promotion of the scheme were fake and misleading, according to the US financial watchdog.
‘Returns’ Were Paid with Other Investors’ Funds
In fact, authorities said Horizon “did not earn any significant profits from legitimate investments” and such returns promised came from other investors’ funds – in the same way that a Ponzi scheme operates.
“As alleged in the complaint, Woods and Southport preyed upon their clients’ fears of losing their hard-earned savings and convinced them to place millions of dollars into a Ponzi scheme by falsely promising them a safe investment with steady returns,” Nekia Hackworth Jones, Director of the SEC’s Atlanta Regional Office, commented. The investigation keeps underway regarding this case.
On July 14, the US SEC filed charges on two individuals based in Israel with allegedly defrauding US investors out of millions of dollars through binary options.
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