A Knoxville, Tenn.-based unregistered broker and his firm took home more than $3.5 million in commissions selling allegedly fraudulent securities from Woodbridge Group and 1 Global Securities to more than 630 retail investors over a two-year period, according to Securities and Exchange Commission claims.
The charges against Henry J. “Trae” Wieniewitz and his firm Wieniewitz Financial are the latest development in the fallout of Woodbridge, which declared bankruptcy in December 2017 after the SEC charged the fund and owner Robert Shapiro with defrauding thousands of investors in a $1.2 billion alleged Ponzi scheme.
According to the SEC complaint, Wieniewitz and his firm sold unregistered Woodbridge securities from February 2016 to March 2017 and sold securities from 1 Global from February 2017 to July 2018 to retail investors in at least five states; he allegedly claimed the Woodbridge and 1 Global securities were “safe and secure.” Many of these clients reportedly invested their retirement savings. He was aware that some states were inquiring whether Woodbridge securities were legitimate when he decided to stop marketing them. 1 Global Securities declared bankruptcy in July 2018, with the SEC claiming 1 Global’s chairman and CEO “were syphoning off millions in investor funds to fund a lavish lifestyle and operate unrelated businesses.”
In August 2018, the SEC charged five unregistered brokers for selling more than $243 million in unregistered Woodbridge funds to 1,600 retail investors, while in December 2018, the Commission charged 13 additional brokers for unlawfully selling more than $350 million in unregistered securities to more than 4,400 investors. Shapiro, as well as Ivan Acevedo and Dane R. Roseman (both former directors of investments at Woodbridge), were arrested and pleaded not guilty in federal court in Los Angeles in April.
Wieniewitz and his firm settled the charges as to liability without admitting or denying the allegations and will be subject to injunctions. The commission is seeking court-ordered injunctions against Wieniewitz and his firm, the return of profits from the unlawful sales with interest and additional civil penalties.