Woodbridge Wealth Files Chapter 11 Bankruptcy

[scagnt83]

Regardless or guilt or wrongdoing, Woodbridge had been offering a rate of return with return of principal for years (to my limited knowledge) for years on their bridge loan plan. Maybe the SEC made a problem with the constant state investigations where there was no problem at all. People were living off these interest payments until the SEC started stepping in. Did Madoff have 9,000 investors? Woodbridge had about 9,000 people involved in this loaned money program.

That is a bunch of feel good nothing. You cant be serious?

Madoff started his firm in the 1960s. He conned millions of people out of money, via 401k plans, pension plans, & direct investments. Major financial institutions such as wall street firms and even insurance carriers had invested in his fund.

But just like Woodbridge, many who actually asked in-depth questions realized that there were serious things not right with the situation. And many stayed away, warned others, and even made reports to authorities.

Madoff said it himself, "all people wanted to hear was how much they were going to make, how much I had made, and what famous people I knew or prestigious positions I had held. The ones who asked the smart questions never invested. The ones that were dazzled by the flash invested everything".

Common sense and logic goes a long way. But greed and denial are powerful forces.

 

[HealthGuy]

Woodbridge issued a press release, dated Dec. 28, see below, what do you guys make of this? Heres the press release implying the SEC investigation is making things worse:

Nevertheless, on December 21, 2017, after more than a year of investigating Mr. Robert Shapiro and well after the Company had initiated a Chapter 11 bankruptcy case intended to protect creditors’ interests, the SEC filed a motion to appoint a receiver over Woodbridge’s property, including those that are part of the Chapter 11 cases. "It is disappointing that the SEC has taken this action despite the productive 2 conversations we held with them and the actions we have taken to protect creditors’ interests since I stepped into this role in early December,” said Mr. Perkins. “The SEC fails to see that its action could cause irreparable harm to our creditors – dramatically alter the Company’s rights, impair and deplete assets of the estate and hinder the reorganization efforts. We are seeking Court protection to ensure we are able to continue with the bankruptcy process and maximize recovery for creditors.” “The SEC’s action would erase the extensive efforts the Company’s independent management has taken to bring transparency to the business and maximize recoveries for all the Company’s constituents,” said Sam Newman, partner at Gibson, Dunn & Crutcher LLP and counsel to Woodbridge.

 

[DHK]

I would expect nothing less including the shifting of the blame to the SEC.

It's like reading an annual report of a mutual fund for investors. There is always a slight bias towards keeping investors happy and calm about the funds' direction. It's up to an advisor to help see through it, determine the client's risk tolerance and plan, and then determine if the fund is still appropriate for the investor's plan.

 

[VolAgent]

I'm confused, what else would a member of management have said?

"Thank god the SEC is here. This place is a cluster****."?

Even if brought in as an outsider, he's now an insider as management. And it would be a rare bird to admit there are serious problems that will be difficult to fix.

 

[walthamny]

Healthguy,

When a firm is investigated by SEC for a year for fraud, it is pretty common for the firm to file for chapter 11 bankruptcy. Obviously, the charges SEC is charging are clearly not bogus, otherwise the firm could have asked a federal judge to stop SEC. I see chapter 11 filing as strategic it is like Woodbridge executives trying to lessen their future upcoming jail sentences. It will make them look better post sentencing.

 

[HealthGuy]

Walthamny...Good thoughtful reply. Woodbridge had a staff of multiple attorneys who for years basically said that the state securities investigations in MA, AZ and TX were merely state by state concerns. Up until the end, they claimed what they were offering was not a security, but a private loan offering not subject to SEC regulations. Does anyone think that the Woodbridge staff attorneys want to go to jail too? The company literally had attorneys on staff up until the end legally defending what they were doing. Do you guys think the attorneys are and were that dumb that they too want to go to jail? Again, Im not defending the company, but have spoken with attorneys at length on staff who legally defended what Woodbridge was doing. Do you think they too were in the 'dark' regarding the Ponzi scheme accusations and only Shapiro and maybe a few others knew this?

Furthermore, Woodbridge marketed this product through unlicensed securities brokers who were advised the same thing by Woodbridge legal: That this was a safe, reliable, non security private loan opportunity. So all of the unlicensed sales reps offering this are going to jail too for being fed 'lies' by Woodbridge ?

 

[DHK]

So all of the unlicensed sales reps offering this are going to jail too for being fed 'lies' by Woodbridge ?

No... but they may be sued by their customers AND may be barred from ever selling securities.

 

[HealthGuy]

DHK: But what about the legal staff at Woodbridge? Are they going to jail too ? They had a staff of attorneys guys. Come on, were they in the dark too about what was supposedly going on???

 

[DHK]

Every person who has a license (attorneys included) are liable for their actions/inactions. Attorneys, CPAs, compliance officers, whoever else... may be held responsible by having licensing revoked and worse.

You can't be on-staff for a boiler-room or ponzi scheme operation and expect to leave unscathed, particularly if you were a person who is licensed and in authority.

Even the movies get this one right:

 

[HealthGuy]

DHK: Woodbridge didnt have anyone 'on staff' boiler room employees selling their Ponzi scheme. There were numerous independent marketing agencies offering this, both securities and non securities licensed agencies. The agencies, from afar, were told from Woodbridge legal what Woodbridge was offering - a relatively 'safe' private loan offering, whether it was accurate or not. None of this makes any sense to me. You have multiple on staff attorneys potentially going to prison then. Who would want to lose their law license over a Ponzi scheme? Really ?