Former Quest Capital Strategies, Inc. Client Wins FINRA Arbitration for $275,000 for Losses Due to Woodbridge Group of Companies Scheme

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In January 2019, a former client of Quest Capital Strategies, Inc. won an award in a FINRA arbitration for compensatory damages for $235,000 in compensatory damages and $41,226.46 in costs for losses sustained from investments in promissory notes of the Woodbridge Mortgage Investment Funds 1 and 2.

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.

The causes of action included violations of federal securities laws; violation of the Virginia securities laws; violation of the Florida Securities and Investor Protection Act; breach of contract; common law fraud; breach of fiduciary duty; and negligence and gross negligence. The causes of action relate to Claimants’ investments in promissory notes of the Woodbridge Mortgage Investment Funds 1 and 2. The FINRA arbitration hearing was conducted in Boca Raton, Florida.

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, Quest Capital Strategies, Inc. may be liable for investment or other losses suffered by its 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.

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Author: Jeffrey Erez

The founder of Erez Law, Jeffrey Erez, focuses exclusively on securities arbitration and litigation. Mr. Erez passionately believes in representing aggrieved investors and obtaining justice for his clients through litigation.