John Woods Barred by SEC Following Ponzi Scheme Allegations

John Woods (CRD #: 1949233), a previously registered broker and investment adviser, allegedly participated in a Ponzi scheme. This is according to his BrokerCheck record, accessed on November 15, 2024. Read on to learn more about his alleged conduct as a broker.

Investor Disputes

Forty-five disputes filed from 2021 to 2024 allege that John Woods was involved in a Ponzi scheme during a collective time frame spanning 2003-2021. Investors received settlements totalling over $75 million.

A pending dispute filed on October 7, 2024, alleged that John Woods violated FINRA Rules, Georgia and North Carolina blue sky laws and the Racketeer Influenced and Corrupt Organizations Act (RICO). The client further alleged that he breached his contract and engaged in a Ponzi scheme from 2013-2016.

On January 9, 2024, an investor alleged that John Woods participated in a Ponzi scheme from 2008-2021. They seek $1.5 million in damages.

On November 4, 2021, an investor named John Woods in a dispute alleging negligence and other misconduct. The client seeks $1.5 million.

Settled Disputes

Disputes filed on March 29 and July 15, 2024, alleged that John Woods invested clients in a speculative, unregistered, and fraudulent private investment. These disputes were settled for $147,500 in total.

On February 23, 2024, an investor alleged that John Woods misrepresented an investment from 2007-2015. The client received a settlement of $140,000.

On December 28, 2021, John Woods was named in a complaint alleging violations of FINRA Rules, and unlawful sales of securities with regard to Horizon Private Equity III. Claimants won $13,979,404 in damages. You can read the arbitration award here.

On November 10, 2021, John Woods was named in a complaint alleging violations of the California Welfare & Institutions Code violation of FINRA Rules regarding supervision in connection with investments in Horizon Private Equity III. Claimants received $1,483,670 in damages. You can access the arbitration award here.

What are Blue Sky Laws?

Blue sky laws are state securities regulations that provide investors with an extra layer of protection against fraud. They frequently also define what investments qualify as securities in the state.

FINRA Rule 2010

FINRA Rule 2010 holds brokers to high standards of commercial honor and just and equitable principles of trade.

FINRA Rule 2020

FINRA Rule 2020 prohibits the use of manipulative, deceptive, or otherwise fraudulent tactics to influence the purchase and sale of securities. Misrepresenting an investment’s risks, requirements, or other features violates this rule.

FINRA Rule 3110

FINRA Rule 3110 requires that firms establish systems of supervision to maintain their compliance with securities regulations.

SEC Regulatory Action

On August 1, 2023, the Securities and Exchange Commission instituted regulatory action against John Woods following the entry of judgment in a lawsuit the SEC had previously filed against him.

The lawsuit alleged that John Woods made false statements to investors and misused and misappropriated client funds in connection with the sale of interest in Horizon Private Equity III, LLC.

Sanctions

On August 1, 2023, the SEC permanently barred John Woods from associating with the following:

• Brokers
• Dealers
• Investment advisers
• Municipal securities dealers
• Municipal advisors
• Transfer agents
• Nationally recognized statistical rating organizations (NRSROs)

SEC Civil Suit

On August 20, 2021, the SEC filed a civil complaint against John Woods, Livingston Group Asset Management Company d/b/a Southport Capital (owned by John Woods), and Horizon Private Equity III, alleging that they engaged in a Ponzi scheme for more than a decade.

The SEC alleged that more than 400 investors in at least 20 states were promised guaranteed returns of 6-7% interest for two to three years by investing in the Horizon Private Equity III fund. Investors were allegedly told that their funds would be used to invest in stocks, government bonds, and other investments, but were instead used to pay returns to earlier investors.

A judgment entered on March 8, 2023, enjoined John Woods from future violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940.

Securities Act of 1933

Section 17(a) of the Securities Act of 1933 prohibits the use of deceptive and fraudulent schemes in the securities business. It specifically bans false or misleading statements and the omission of material facts relating to securities.

Securities Exchange Act of 1934

Section 10(b) of the Securities Exchange Act of 1934 forbids the use of manipulative or deceptive devices in relation to the purchase or sale of securities. Rule 10b-5 extends this to include fraudulent schemes, untrue statements and omissions of fact.

Investment Advisers Act of 1940

Sections 206(1) and (2) of the Investment Advisers Act of 1940 forbid the use of fraudulent and deceptive schemes or practices.

Class Action Lawsuit

On September 20, 2021, a class action lawsuit was filed on behalf of all persons and entities invested in Horizon Private Equity III from 2008 through 2021. This lawsuit alleged that Oppenheimer & Company engaged in negligent misrepresentation, violated the Georgia RICO statute, and aided and abetted fraud.

It further alleged that the firm failed to supervise three employees who engaged in a fraudulent scheme. This lawsuit was denied.

Termination from Southport Capital

On August 23, 2021, John Woods was fired from Southport Capital following an SEC investigation into allegations he participated in a Ponzi scheme.

John Woods Background Information

John Woods has passed the following exams:

• Series 65 Uniform Investment Adviser Law Examination
• Series 63 Uniform Securities Agent State Law Examination
• Securities Industry Essentials Examination
• Serie 7 General Securities Representative Examination

John Woods has worked with the following firms:

• Oppenheimer & Co. (CRD #: 249)
• CIBC World Markets (CRD #: 630)
• Lehman Brothers (CRD #: 7506)

Kurta Law Can Help 

If you lost money after working with John Woods, please contact us today at 877-600-0098 or info@kurtalawfirm.com for a free consultation. 

For nearly 20 years, Kurta Law has advocated for investors to recover their investment losses from brokers and brokerage firms. Kurta Law is a nationally recognized law firm and exclusively represents investors against brokers and brokerage firms on a contingency basis. This means that the firm only earns a fee if our securities attorneys recover money on your behalf.