What Did Your Brokerage Firm or Investment Adviser Do Wrong With GWG
Published On: February 9, 2022

Chicago-based Stoltmann Law Offices represents investors nationwide on a contingency fee basis who’ve been victimized by Ponzi schemes. One of the most notorious Ponzi schemes in recent years involved Horizon Private Equity, which bilked some $110 million from 400 investors. The operators of the scheme have been sued by investors in a class action lawsuit, but some investors have viable individual claims to pursue against Oppenheimer through FINRA Arbitration. The fund was sold by brokers at Oppenheimer.

An investor class-action suit claims “Oppenheimer management, from 2008 through December 31, 2016, actively aided” John J. Woods (the lead seller for Horizon); his brother, defendant James Wallace Woods; and their cousin, defendant Michael J. Mooney, each a financial adviser at the firm, with funneling investor money into Horizon.” The Horizon scheme “continued to raise money from unsuspecting investors through Southport Capital, a registered investment advisory firm, for nearly five more years,” the suit alleges. The alleged Ponzi scheme, according to the suit, “made no significant profits from legitimate investments, and `returns’ to investors came instead from new investor money.”

On August 20 2021, the U.S. Securities and Exchange Commission (SEC) filed an emergency action against Woods, Southport Capital and Horizon Private Equity, III, LLC for “alleged violations of federal securities fraud, with the intent of freezing the parties’ assets, appointing a receiver and gaining a full accounting of the finances involved.”

Like all Ponzi schemes, Horizon promised investor returns which were bogus. “Investors were falsely and fraudulently told by Woods and other advisers that they would receive returns of six to seven percent interest, guaranteed for two to three years, and that their money would be put into ‘government bonds, stocks, or small real estate projects.’  Importantly, returns of six to seven percent per year are not exorbitant or so high to cause alarm. If an investment promises 6% per month return, that would be a far different story.  The Horizon scheme falls more into the Bernie Madoff style Ponzi scheme. Madoff never generated outlandish returns; he just never lost money no matter what the market did, for decades. Although unrealistic, Madoff’s returns were not alarming like those promised by many Ponzi schemes. The adage of “too good to be true” does not apply to Horizon investor-victims.

Investors-victims who were clients of Woods when he was registered with Oppenheimer could have a viable claim against Oppenheimer for failure to warn and supervise. Evidence suggests that Oppenheimer knew Woods was operating a vast outside fund and did nothing about it and chose to push him and his team out the door without saying a word to his clients.  This clear self-interest is a breach of a foundational duty to act in the interests of clients in good faith, and fair dealing.

If you invested on the Horizon Equity Ponzi scheme, you may have a claim to pursue through FINRA Arbitration. Please contact Stoltmann Law Offices, P.C. at 312-332-4200 for a free, no obligation consultation with a securities attorney. Stoltmann Law Offices is a contingency fee law firm which means we do not get paid until you do!


The posting on this site are mere OPINIONS and NOT statements of fact in any way whatsoever. The information should not be relied upon and there have been no findings made against the firms or individuals referenced on this site. In addition, this Blog is made available for educational purposes only and incorporates information from the web as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand that there is no attorney client relationship between you and Stoltmann Law Offices (161 N Clark Street 16th Floor Chicago, IL 60601). The Blog opinions should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.


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