In February 2019, FINRA barred Former MSI Financial Services, Inc. financial advisor Floyd Powell (CRD# 2220029) related to investment losses due to his recommendations in the Woodbridge Group of Companies, which is now a known Ponzi Scheme. Powell has been registered with MML Investors Services, LLC in Albertville, Alabama from March 2017 to February 2018 and with MSI Financial Services, Inc. in Albertville, Alabama from 1992 to 2017.
The Woodbridge Group of Companies was a southern California luxury real estate developer. It is alleged that unregistered brokers sold unregistered securities in the purchase and sale of securities. The company missed payments on notes sold to investors and filed chapter 11 bankruptcy in December 2017, along with 281 subsidiaries and affiliates, citing “unforeseen costs associated with ongoing litigation and regulatory compliance.” The company has $750 million in debt and has a commitment of $150 Million in DIP financing from an investor, Hankey Capital.
In January 2019, The Securities and Exchange Commission (SEC) announced that a federal court in Florida ordered Woodbridge Group of Companies LLC and its former owner to pay $1 billion in penalties and disgorgement for operating a Ponzi scheme that targeted retail investors.
The judgement was against Woodbridge and its 281 related companies, ordering them to pay $892 million in disgorgement. The court ordered former owner and CEO Robert H. Shapiro to pay a $100 million civil penalty and to disgorge $18.5 million in ill-gotten gains plus $2.1 million in prejudgment interest.
Powell has been the subject of four customer complaints from 2018, according to his CRD report:
- October 2018. “Beginning in or around 2016, the Claimants allege that the rep recommended that they invest in unregistered and fraudulent investment programs, made false representations and failed to disclose material facts about the investments.” The customer is seeking $3,169,727 in damages and the case is currently pending. This case is regarding unregistered securities.
- October 2018. “The customer alleges the rep made inappropriate and unsuitable investment recommendations to and transactions for the Complainant, beginning in early 2017.” The case is currently pending. This case is regarding promissory notes.
- August 2018. “Claimant alleged violation of securities law regarding the former representative’s recommendation to invest in unregistered and fraudulent investment program, in July 2016.” The customer is seeking $290,001 in damages and the case is currently pending. This case is regarding unregistered securities.
- May 2018. “Plaintiffs alleged the former advisor recommended unregistered and fraudulent investment programs in January and July 2017.” The customer is seeking $135,715.67 in damages and the case is currently pending. This case is regarding promissory notes.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, MSI Financial Services, Inc. may be liable for investment or other losses suffered by Powell’s customers.
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If and have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.