John Justin Woods – SEC Alleges Financial Advisor is Running Ponzi Scheme| Recover Investment Losses
John Woods has been running a massive Ponzi scheme for over a decade. As of the end of July 2021, investors in the Ponzi scheme were owed over $110,000,000 in principal. There are more than 400 investors, residing in at least 20 different states, who currently hold investments in the Ponzi scheme, which goes by the name Horizon Private Equity, III, LLC (“Horizon”). Many of the victims are elderly retirees who were preyed upon by investment advisers at Livingston Group Asset Management Company d/b/a Southport Capital (“Southport”), a registered investment adviser firm owned and controlled by Woods. The Defendants’ Ponzi scheme is ongoing and continues to raise money from new investors each month.
Woods and other investment adviser representatives at Southport told clients that they would receive returns of 6-7% interest, guaranteed for two to three years, for non-specific investments in a fund called “Horizon Private Equity.” Woods and his cohorts at Southport generally told investors that Horizon would earn a return by investing their money in, for example, government bonds, stocks, or small real estate projects; investors were not told that their money would or could be used to pay returns to earlier investors. But that is exactly what the Defendants did—they were only able to pay the guaranteed returns to existing investors by raising and using new investor money. Horizon has not earned any significant profits from legitimate investments; instead a very large percentage of purported “returns” to earlier investors were simply paid out of new investor money.
The assets owned by Woods and the entities under his control, including Southport and Horizon, are worth far too little for there to be any realistic prospect that the Ponzi scheme will be able to pay back existing investors their principal, let alone the promised returns. Investors trusted Woods and the Southport investment advisers working at his direction, and they stand to lose significant portions of their retirement savings when the Ponzi scheme inevitably collapses. The longer the scheme continues, the larger the losses will be for those left holding the bag.
Defendant Southport, which is registered with the SEC as Livingston Group Asset Management Company, Inc., has more than $824,000,000 in client assets under management. As the President and majority owner of the firm, Woods has extensively used Southport’s offices and employees to carry out his Ponzi scheme. Given his fraudulent conduct, and Southport’s role in the fraud, Woods cannot be allowed to remain in charge of a firm with such a significant sum of client assets under management. Horizon is an entity that Woods used strictly for the purpose of
raising money from investors in the Ponzi scheme. Horizon has no offices or employees of its own; all of its activities have been conducted by Woods and Southport employees. At all times relevant to this case, Woods had actual control over Horizon’s assets and operations, and ultimate control over the use and disposition of investor funds. Because the scheme has been going on for so long, and because Woods, Southport, and Horizon did not use any of the typical record-keeping practices one would expect from a legitimate investment fund, millions of dollars’ worth of investor funds are currently unaccounted for.
Emergency relief is important in this case. Woods and Horizon, through Southport’s investment advisers, raised in excess of $600,000 per month in new investments during the most recent months for which the Commission has been able to obtain bank records. The Commission believes that additional victims are being defrauded on a daily basis. Given the scope and duration of this Ponzi scheme, an asset freeze and a receiver are necessary to gather, preserve and protect whatever assets still exist for the benefit of the victims of the Defendants’ Ponzi scheme.
Goodman & Nekvasil P.A. May Recover Investor Losses
If you lost money on investments with John Justin Woods and believe the investments may have been unsuitable or otherwise improper for you, we would like to discuss the possibility of your retaining our firm to represent you in an arbitration action concerning John Justin Woods’ conduct. There is no charge for an evaluation of your case. Further, we handle our cases on a contingency fee basis. This means that unless we recover money for you, we charge no attorney’s fee. Unless you recover any money, you pay us nothing, not even the costs and expenses which the firm will advance on your behalf.
Kalju Nekvasil, Esq., formerly regional counsel with the NASD, now known as FINRA, has practiced in this area of the law for more than 35 years. Goodman & Nekvasil, P.A. has recovered more than $200 million on behalf of victimized investors. If you lost money on investments with John Justin Woods and would like your case evaluated by a securities attorney (again, there is no charge for an evaluation and all cases are handled on a purely contingency fee basis), please contact us.
Some of the information in this blog post was obtained on 8/24/2021 directly from FINRA BrokerCheck, without any changes. If you believe this information was reported incorrectly, please contact our firm at 1-800-500-4442.