The U.S. Securities and Exchange Commission has charged an unlicensed broker and his Knoxville, Tenn.-based firm, Wieniewitz Financial, for unlawfully offering and selling securities of the Woodbridge Group of Companies and 1 Global Capital.
The SEC's complaint said Henry J. "Trae" Wieniewitz, III and Wieniewitz Financial illegally offered and sold Woodbridge and 1 Global securities to more than 630 retail investors from at least February 2016 to July 2018. The SEC alleges that throughout this period, Wieniewitz and his company were neither registered as broker-dealers with the Commission nor associated with a registered broker-dealer.
The SEC previously charged Woodbridge, its owner, and others with operating a $1.2 billion Ponzi scheme, and charged 1 Global and its owner with operating a fraudulent scheme to misappropriate millions of dollars from investors.
Woodbridge allegedly bilked 8,400 investors in an elaborate Ponzi scheme in which high-pressure sales agents were used to prey on investors, many of them seniors who had invested in retirement funds, and were told they would be repaid from high rates of interest on loans to third-party borrowers, the SEC said.
Thirteen Woodbridge sales agents also were charged for various registration violations, the SEC said. Those 13 individual defendants charged were among Woodbridge’s top revenue producers, selling more than $350 million of its unregistered securities to more than 4,400 investors, according to the SEC release last December when the charges were announced.
According to the SEC, Wieniewitz and Wieniewitz Financial raised more than $11.4 million and took in approximately $500,000 in commissions from unlawful sales of Woodbridge securities. They also raised more than $53 million and obtained approximately $3 million in commissions from unlawful sales of 1 Global securities.
The complaint filed Monday in the U.S. District Court for the Southern District of Florida seeks court-ordered injunctions, return of allegedly ill-gotten gains with interest, and financial penalties against Wieniewitz and Wieniewitz Financial.
The SEC said Wieniewitz and Wieniewitz Financial settled the SEC's charges as to liability without admitting or denying the allegations, and agreed to be subject to injunctions, with the court to determine the amounts of disgorgement, interest, and penalties at a later date.