Andrew Kelly/Reuters
A Georgian man is being charged by the SEC with operating a Ponzi scheme that lasted ten years.
According to the regulator, John Woods exploited elderly victims as part of the scheme.
Woods is alleged to have operated the Ponzi scheme via two entities: Southport Capital, and Horizon Private Equity.
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A Georgian man is being charged by the SEC with operating a Ponzi scheme that raised over $110 million from more than 400 investors for a decade.
Last Friday, the securities regulator filed an emergency order to stop the Ponzi scheme. It alleges that John Woods, a Georgia resident, and two entities he controls (registered investment advisor Southport Capital and Horizon Private Equity) were involved.
According to the SEC complaint, Woods and other Southport financial advisers claimed that clients would get returns of 6% to 7% if they invested in Horizon funds. This guarantee was guaranteed for up to three years. According to the SEC, the fund was an entity Woods created solely for the purpose of raising money from Ponzi scheme investors.
According to the SEC, "Many of these victims were elderly retirees who were preyed on by investment advisors" at Southport.
According to the regulator, Woods made guaranteed returns for existing investors by raising capital from new investors through the scheme. SEC said that Woods' Ponzi scheme continues monthly to raise funds from new investors.
The complaint stated that Woods' assets and those of his entities, including Southport, Horizon and Horizon, were far too small to allow for any realistic prospect that the Ponzi scheme would be able pay existing investors their principal or promise returns. Woods and Southport's investment advisors were trusted by investors, who stand to lose substantial amounts of their retirement savings if the Ponzi scheme collapses.
The US District Court for Northern District of Georgia filed the SEC's complaint. The court granted Woods and Horizon a temporary restraining and asset freeze on Tuesday. It also ordered Southport to be discovered expeditiously.
