MIAMI and LOS ANGELES, Sept. 23, 2021 (GLOBE NEWSWIRE) -- National investment fraud law firm Dimond Kaplan & Rothstein, P.A. (“DKR”) (http://www.dkrpa.com) is investigating potential claims against brokerage firm Oppenheimer & Co., Inc. (“Oppenheimer”) (NYSE: OPY) on behalf of customers who invested in Horizon Private Equity III (“Horizon”). The United States Securities and Exchange Commission (“SEC”) has filed a complaint against former Oppenheimer broker John Woods and Woods’ investment advisory firm, Livingston Group Asset Management Company d/b/a Southport Capital (“Southport”), alleging that Woods ran Horizon as a Ponzi scheme for more than a decade.
Woods is believed to have solicited a significant number of Oppenheimer customers to invest in Horizon when he was registered as a broker with Oppenheimer. The SEC has alleged that Woods bilked more than 400 investors out of more than $110 million.
The Alleged Ponzi Scheme
According to the SEC’s complaint, broker John J. Woods began his Ponzi scheme in 2008 when he was a broker with Oppenheimer. The SEC has alleged that Woods often targeted elderly investors and promised guaranteed returns of 6% to 7% for two to three years.
Woods reportedly told investors that Horizon would generate returns by investing in government bonds, stocks, or small real estate projects. Investors were not told that their money would be used to pay “investment returns” to earlier investors. But the SEC says that is exactly what Woods did. That is, the SEC accuses Woods of running a classic Ponzi scheme by using newer investors’ money to pay purported investment returns to earlier investors. The SEC also claims that Horizon did not make any significant returns from legitimate investments. Millions of dollars of investor assets remain unaccounted for.
Oppenheimer May Have Violated Its Obligations to Oppenheimer Customers
It has been reported that Oppenheimer was aware that Woods was operating Horizon and failed to fire Woods when it learned that Woods was engaging in improper conduct. Rather, Oppenheimer permitted Woods to resign voluntarily. We understand that Oppenheimer did not contact Woods’ customers who invested in Horizon to inform them of Woods’ misconduct.
Oppenheimer was required to supervise its brokers’ activities and investment recommendations. “This supervisory function is vital to protect customers from broker misconduct,” said DKR partner, Jeffrey Kaplan. Oppenheimer can be held liable for investors’ losses as a result of a failure to supervise Woods. Brokerage firms also owe disclosure obligations to their customers. Oppenheimer may be found liable for Horizon investors’ losses as a result of the failure to inform customers of Woods’ misconduct.
FINRA Arbitration Claims May Be More Favorable than a Class Action
While a class action lawsuit has been filed against Oppenheimer on behalf of Horizon investors, that may not be the best avenue for many Horizon investors to recover their losses. A FINRA arbitration claim may be a better alternative for many investors seeking to recover their losses.
Class actions can take many years and loss recoveries in investment fraud class actions often are far less than recoveries obtained by investors who file their own FINRA arbitration claims. FINRA arbitration cases often are completed in 12 to 18 months and generally are more cost efficient than a class action. Any investor who has lost $100,000 or more in Horizon Private Equity III should consider filing a FINRA arbitration claim to recover their losses.
Speak with an Dimond Kaplan & Rothstein Investment Fraud Attorney
Current and former Oppenheimer or Southport customers who invested in Horizon Private Equity III are encouraged to contact Dimond Kaplan & Rothstein, P.A. for a FREE case evaluation.
DKR has vast experience representing victims of Ponzi schemes and other investment fraud. The firm has recovered millions of dollars for Ponzi-scheme victims throughout the United States and the firm will aggressively pursue claims to recover your losses.
DKR represents clients nationwide from offices located in Miami, Los Angeles, West Palm Beach, New York, Detroit, and Naples. Translation services are available.
Jeffrey B. Kaplan, Esq.
2665 S. Bayshore Drive
Miami, Florida 33133
Los Angeles Office
2029 Century Park East
Century Plaza Tower
Los Angeles, CA 90067