Erez Law is currently investigating former American Portfolios Financial Services, Inc. financial advisor Gary Forrest (CRD# 1313782) regarding recommendations to invest in the Woodbridge Group of Companies. Forrest was registered with American Portfolios Financial Services, Inc. in Flint, Michigan from 2007 to November 2016.
In April 2019, FINRA suspended Forrest for 10 months and sanctioned him to a $5,000 civil and administrative penalty and fine, as well as $25,905.60 in disgorgement after he “consented to the sanctions and to the entry of findings that he engaged in unapproved private securities transactions involving the sale of promissory notes totaling $826,986, relating to Woodbridge Group of Companies LLC (“Woodbridge”) a purported real-estate investment fund, to investors, some of whom were his member firm’s customers. The findings stated that Forrest received $25,905 in commissions in connection with these transactions. Although Forrest sought approval to sell the Woodbridge promissory notes, his firm denied his request. Despite this denial, Forrest sold the Woodbridge promissory notes while associated with the firm. Further, Woodbridge filed a voluntary Chapter 11 bankruptcy petition. The United States District Court for the Southern District of Florida issued final judgments against, among others, Woodbridge and its former owner, in Case No. 17-24624. Those judgments required Woodbridge and its former owner to, among other things, disgorge their ill-gotten gains and required the former owner to pay a civil penalty.”
In January 2018, the state of Michigan opened up an investigation into Forrest regarding his involvement in the Woodbridge Group of Companies. According to Forrest’s CRD report, “Gary A. Forrest offered or sold twelve Woodbridge securities in the State of Michigan which were not federally covered, exempt from registration, or registered, in violation of section 301 of the Securities Act, MCL 451.2301.”
The Woodbridge Group of Companies is a southern California luxury real estate developer that missed payments on notes sold to investors and filed chapter 11 bankruptcy in December 2017, along with 275 subsidiaries and affiliates, citing “unforeseen costs associated with ongoing litigation and regulatory compliance.” It is alleged that elderly and other investors invested millions of dollars into the Woodbridge Group of Companies investment programs. The investors were allegedly told that these were secure investments in real estate, which is not the case as evidenced by these bankruptcy proceedings.
The SEC is investigating whether 235 LLCs have violated the anti fraud, broker-dealer and securities registration provisions of the federal securities laws in connection with the Woodbridge Group of Companies receipt of more than $1 billion of investor funds from thousands of investors nationwide. The SEC is investigating the offer and sale of unregistered securities, the sale of securities by unregistered brokers and the commission of fraud in connection with the offer, purchase and sale of securities.
Forrest has been the subject of two customer complaints between 2018 and 2020, according to his CRD report:
- April 2020. “Claimants allege violations of Federal Securities Laws, violation of Michigan Uniform Securities Act, violation of Michigan Consumer Protection Act, breach of contract, common law fraud, breach of fiduciary duty, and negligence.” The customer is seeking $300,000 in damages and the case is currently pending.
- August 2018. “Misrepresentation and unsuitable recommendation of fraudulent unregistered securities.” The customer is seeking $100,001 in damages and the case is currently pending.
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, American Portfolios Financial Services, Inc. may be liable for investment or other losses suffered by Forrest’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.