The Ponzi scheme collapsed in December 2017, when Shapiro caused Woodbridge and its many related companies to file for bankruptcy, the complaint said. Once Woodbridge filed for bankruptcy, investors stopped receiving their monthly interest payments and have not received a return of their investment principal.
Church-Koegel, Goldman and Walker, acting as unregistered brokers, together were responsible for raising through their own efforts and the efforts of external sales agents that they assisted, from thousands of investors in more than 40 states, the complaint said.
The trio was rewarded with at least $2.75 million in transaction-based compensation—Church-Koegel and Goldman receiving more than $1 million each, and Walker receiving more than $750,000—in addition to their salaries. The complaint also said they held no securities licenses, were not registered with the SEC and were not associated with registered broker-dealers during their time with Woodbridge.
Woodbridge’s securities were not registered with the commission, nor did they qualify for an exemption from registration. Thus, they were not permitted to sell Woodbridge’s securities, the complaint noted.
The SEC's complaint, filed in the Southern District of Florida, accuses Church-Koegel, Goldman and Walker with violating the securities registration provisions and the broker-dealer registration provision, and seeks disgorgement of ill-gotten gains, prejudgment interest and civil penalties against each of them.
The SEC said its investigation is continuing.