Woodbridge Group of Companies Investment Losses with Former Forest Securities, Inc. Broker Jeffrey Nimmow
Posted on Wednesday, March 18th, 2020 at 1:47 pm
Former Forest Securities, Inc. broker Jeffrey Nimmow (CRD# 2693601) is accused of recommending unsuitable Woodbridge Group of Companies investments. Nimmow was registered with Forest Securities, Inc. in Hillside, Illinois from 2015 to 2018, when he was terminated regarding, “Inaccurate judgment by the representative involving Woodbridge promissory notes and mortgages contained in Woodbridge funds. Representative presented Woodbridge to customers through Legacy Financial Network& Retirement Services, Inc. a company Representative solely owned. After providing Outside Business Activity approval for Representative to sell First Position Commercial Mortgages thru Legacy, Forest did not receive ant compensation for these transactions.”
In February 2020, FINRA barred Nimmow after he, “consented to the sanction and to the entry of findings that he engaged in the sale of promissory notes to investors totaling at least $3,365,000 without disclosing and receiving approval from his member firm. The findings stated that the promissory notes were for a self-advertised real-estate investment fund and were unregistered securities. The findings also stated that Nimmow was only registered to sell certain categories of securities and did not possess the proper FINRA registration to sell these promissory notes. Nimmow received approximately $177,937 in commissions for these transactions. Later, the fund filed a voluntary Chapter 11 Bankruptcy petition. The SEC filed a complaint with the U.S. District Court for the Southern District of Florida against the fund and its former owner, among others, claiming that they ran a Ponzi scheme. The U.S. District Court issued a final judgment, requiring the real-estate investment fund and its owner, among other things, to disgorge their ill-gotten gains. The order also required the owner to pay a civil penalty.”
The Woodbridge Group of Companies was a southern California luxury real estate developer who operated a $1 million Ponzi scheme. 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 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.
It is alleged that investors were promised as high as 10% commissions on investments in the Woodbridge Group of Companies. It is also alleged that Shapiro used money from new investors to repay earlier ones and stole as much as $95 million, routing money through a network of 270 limited liability companies he controlled. According to the statement, at least 2,600 of these investor victims invested their retirement savings, totaling approximately $400 million.
Nimmow has been the subject of four customer complaints in 2018, one of which was withdrawn and one was closed without action, according to his CRD report:
August 2018. “Between February 2017 and August 2017, Representative solicited customer to loan money to Woodbridge group of companies Fund III. After having received Outside Business Activity approval from Forest Securities, Inc., to sell First Position Commercial Mortgages, representative presented Woodbridge through Legacy Financial Network & Retirement Services, Inc., a company representative solely owned, and Forest did not receive any compensation for these transactions.” The customer is seeking $150,000 in damages and the case is currently pending. The complaint was regarding direct investments and promissory notes and took place while Nimmow was registered with Forest Securities, Inc.
February 2018. “Claimant alleges that between late 2015 and November 2017, Representative solicited customer to loan money to Woodbridge Group of Companies in various funds. After having received Outside Business Activity approval from Forest Securities, Inc., to sell First Position Commercial Mortgages, representative presented Woodbridge through Legacy Financial Network & Retirement Services, Inc., a company representative solely owned, and Forest did not receive any compensation for any transaction.” The customer is seeking $450,000 in damages and the case is currently pending. The complaint was regarding direct investments and promissory notes and took place while Nimmow was registered with Forest Securities, Inc.
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, Forest Securities, Inc. may be liable for investment or other losses suffered by Nimmow’s customers.
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