WASHINGTON, Jan 29: An investment company in the US state of Florida has been fined $1 billion, much of which will be used to reimburse more than 8,000 retail investors for loses in an illegal Ponzi scheme, the Securities and Exchange Commission (SEC) said in a press release.
“The Honorable Judge Marcia G Cooke of the US District Court for the Southern District of Florida approved judgments against Woodbridge [Group] and its 281 related companies ordering them to pay $892 million in disgorgement,” the release said on Monday.
“The court ordered former owner and CEO Robert H. Shapiro to pay a $100 million civil penalty and to disgorge $18.5 million in ill-gotten gains plus $2.1 million in prejudgment interest.”
The judgment resulted from a December 2017 SEC lawsuit charging the company and other defendants with operating a massive $1.2 billion Ponzi scheme that defrauded 8,400 retail investors nationwide, many of them seniors who had invested retirement funds, the release said. The SEC’s complaint alleged that Shapiro made Ponzi payments to investors and used a web of shell companies to conceal the scheme.
The court’s disgorgement order against the Woodbridge Group and related defendants will be administered by a liquidation trust, which will distribute proceeds from the settlement and sales of the company’s assets to cheated investors, according to the release.
(AGENCIES)
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