COBB COUNTY, Ga. — A man is facing federal charges after authorities said he operated an alleged Ponzi scheme that wracked up more than $100 million for over a decade.
John Woods, of Marietta, is accused of using two entities he controls to conduct the alleged “massive” scheme: registered investment adviser Livingston Group Asset Management Company, d/b/a Southport Capital (Southport), and investment fund Horizon Private Equity, III, LLC (Horizon).
On Aug. 20, the Security and Exchange Commission filed an emergency action to stop the alleged scheme. Four days later, the United States District Court for the Northern District of Georgia granted a temporary restraining order and froze the assets of Woods and Horizon. Authorities are still searching Southport’s assets.
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According to the SEC’s complaint, Woods raised more than $110 million from over 400 investors in 20 states by offering and selling membership units in Horizon.
Woods, Southport, and other Southport investment adviser representatives allegedly told investors - including many elderly retirees - that their Horizon investments were safe, would be used for different investment activities, would pay a fixed rate of return, and that investors could get their principal back without penalty after a short waiting period.
According to the complaint, however, these statements were false and misleading: Horizon did not earn any significant profits from legitimate investments, and a very large percentage of purported “returns” to earlier investors were simply paid out of new investor money.
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The complaint also alleges that Woods repeatedly lied to the SEC during regulatory examinations of Southport.
Woods, Southport and Horizon are charged with violating several antifraud provisions of the Securities Act of 1933, Securities and Exchange Act of 1934, the Investment Advisers Act of 1940 and with aiding and abetting the violations of the other defendants.
The complaint seeks preliminary and permanent injunctions, disgorgement, prejudgment interest, civil penalties, an asset freeze, and the appointment of a receiver.
READ THE FULL SEC COMPLAINT HERE.
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