The Securities and Exchange Commission (SEC) recently charged John Woods, a Georgia-based registered investment advisor, with running a $110 million Ponzi scheme.
According to court documents and news reports, Woods reportedly ran the scheme for decades and successfully defrauded more than 400 investors across the country. The SEC froze Woods’ assets earlier this week upon filing charges.
The SEC claims that Woods ran the scheme via Southport Capital, Livingston Group Asset Management Company, and Horizon Private Equity, III LLC investment fund. Horizon’s assets were frozen, as well. Woods is a majority owner and operator of Southport Capital, a registered investment advisory firm based in Chattanooga, Tennessee. Southport reportedly holds more than $800 million in assets under management (AUM).
Woods reportedly made several false representations to clients in exchange for their investments. The SEC claims that many retirees were victims of Woods’ apparent fraud. Woods assured victims that their money was safe in the Horizon fund, as he promised investors a fixed rate of return of 6-7%. Victims were also assured that their investments were liquid after a short waiting period if they decided to pull their money.
However, the SEC finds that Woods misled and lied to investors based on these prior assurances. Horizon did not achieve the returns that Woods reportedly guaranteed. Instead, Woods apparently repaid his prior investors with money that he received from new investors. This is the fundamental definition of a Ponzi scheme, and the SEC accordingly charged Woods with running such a scheme.
Vernon Litigation Group is investigating these funds and related claims for clients. If you are an investor in Horizon Private Equity, Livingston Group Asset Management Company, and/or a client of Southport Capital, please contact us today to discuss your rights and options going forward. Call 239-319-4434 for a confidential, no-cost consultation with one of our experienced financial attorneys.