Florida: $1B in unregistered securities sold

Firm faces new state complaint

The state’s Office of Financial Regulation has filed an administrative complaint against several South Floridians and accused them of selling unregistered securities to investors in the failed Woodbridge Group of Cos.

According to the state’s complaint filed Monday, Woodbridge and its agents allegedly sold investors two types of unregistered securities: “promissory notes totaling at least $800 million (sold in approximately 8,000 transactions) and private placement ‘units’ totaling at least $200 million.”

Both Woodbridge and its sales agents marketed the investment program by calling the opportunity a “First Position Commercial Mortgage,” the complaint says. Woodbridge called the mortgages “private third party” loans.

The state agency alleges the Florida sales agents committed more than 3,300 state securities violations against more than 800 Florida investors who sank $100 million into Woodbridge.

The company, which was founded in Boca Raton and moved to California, is now in bankruptcy and faces federal allegations that it was a Ponzi scheme. It filed for Chapter 11 bankruptcy protection in Delaware on Dec. 4 after an extensive investigation by the Securities and Exchange Commission. In a suit filed in U.S. District Court in Miami, the SEC declared that the company and its founder, Robert Shapiro, operated a Ponzi scheme while raising $1 billion to $1.2 billion in the United States through the sale of unregistered securities.

Shapiro declined to speak with SEC lawyers during their investigation and invoked his Fifth Amendment right against self-incrimination in the bankruptcy case. Late last year, Miami attorney Ryan O’Quinn, speaking