Woodbridge Group Top Brass Pleads the 5th Amendment in Order to Avoid Self-Incrimination

Officials at the Woodbridge Group have taken the 5th Amendment in order to avoid self-incrimination, according to letter to Woodbridge Group President, Robert Shapiro, via a March 27, 2017 letter to the SEC from his attorney Ryan O’Quinn.

The letter states that:

“Upon consideration of the SEC’s investigative subpoenas and a review with counsel of the individual rights afforded by the United States Constitution, Mr. Shapiro will rely on his constitutional privilege to refuse to be a witness against himself.”

Recently the SEC filed an application and supporting papers in federal court in Miami which stated that the SEC is investigating whether Woodbridge or others have allegedly violated, or are violating, the antifraud, broker-dealer and securities registration provisions of the federal securities laws in connection with Woodbridge’s receipt of over $1 billion of investor funds from thousands of investors nationwide, SEC Documents report.

The 236 LLC subpoenas allegedly sought basic information about the formation, ownership and bank account information about the LLCs, in order to garner further insight into their affiliation and connection with Woodbridge and its President, Robert Shapiro, according to an SEC Application.

The SEC Documents further state that 235 LLCs appear to have allegedly engaged in financial transactions with the Woodbridge Group of Companies, LLC, of Sherman Oaks, California, and may also allegedly be owned and/or controlled by Woodbridge’s President, Robert Shapiro.

However, despite service of the subpoenas, and demand letters sent approximately six-weeks later, the Commission has allegedly not received a response from 235 of the LLCs, the SEC Application notes.

Woodbridge’s operations are purportedly ongoing and it allegedly continues to raise significant funds from investors, and therefore the SEC has brought a summary proceeding to obtain key documents necessary to its investigation, according to an SEC Application.

What is more, Woodbridge Group Comptroller Nina Pedersen has also invoked her fifth amendment privilege as to testimony and as to the act of producing documents, according to the SEC.

Many attorneys will point out that, while all individuals are presumed innocent until proven guilty, it is certainly not a positive sign for individuals or associated investors when the Fifth Amendment privilege against self incrimination is implemented.

It is also important to note that while a witness can invoke the Fifth Amendment to avoid giving answers that will incriminate him or potentially connect them to a potential criminal liability, it cannot be used to avoid questions which might be embarrassing or potentially damaging to one’s reputation.

United States District Judge Cecilia M. Altonaga Reportedly Entered an Order Granting the SEC’s Application to Enforce and Administrative Subpoena against the Woodbridge Group of Companies, LLC

The SEC, as part of its investigation, allegedly issued a subpoena to Woodbridge on January 31, 2017, for documents, purportedly including e-mails which are certain to capture highly relevant real-time communications of those potentially engaged in fraud, according to SEC Reports.

On September 19, 2017, United States District Judge Cecilia M. Altonaga allegedly entered an Order granting the SEC’s Application to Enforce and Administrative Subpoena against the Woodbridge Group of Companies, LLC, the SEC Reports.

However, it does look that Woodbridge Group has allegedly not obeyed the Court’s order, and is now fighting the SEC’s Motion for Contempt of Court, according to SEC Reports.

According to the SEC, over the course of the past year, the SEC has been investigating Woodbridge in connection with alleged possible significant violations of the securities laws, including purported anti-fraud violations.

Brokerage firms and their financial advisors have a duty to perform adequate due diligence on any investment that they recommend to investors, and financial advisors must inform investors of the risks associated with any investment, and conduct a suitability analysis to determine if an investment meets an investor’s investment objectives and risk profile.

An unsuitable recommendation to purchase an investment or a misrepresentation or omission to disclose material facts about the nature, risk and characteristics of the investment may subject the advisor and their firm to liability for damages.

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The Peiffer Wolf Carr & Kane securities lawyers assist investors who lose money as a result of investment fraud. They take most cases of this type on a contingency fee basis and advance the case costs, and only get paid for their fees and costs out of money they recover for their clients.

Investors who believe they have lost money as a result of investment fraud schemes are encouraged to contact the securities lawyers at Peiffer Wolf Carr & Kane, Jason kane or James Booker, for a free no-obligation evaluation of their recovery options, at 216-589-9280 or via e-mail at jbooker@pwcklegal.com.