SEC Sues Operators of $110 Million Ponzi Scheme

The US Securities and Exchange Commission (SEC) announced that it has charged a Georgia resident in a case involving a Ponzi scheme.

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The regulator said that John Woods and two entities he controls: registered investment adviser Livingston Group Asset Management Company, d/b/a Southport Capital (Southport), and investment fund Horizon Private Equity, III LLC (Horizon) were charged for operating fraudulent fund-raising campaigns.

Specifically, the defendants have raised more than $110 million from over 400 investors in 20 states by offering and selling membership units in Horizon. Woods, Southport, and other Southport investment adviser representatives allegedly told investors that their Horizon investments were safe, would be used for different investment activities, would pay a fixed rate of return, and that investors could get their principal back without penalty after a short waiting period.

However, Horizon did not earn any significant profits from legitimate investments, and a very large percentage of purported "returns" to earlier investors were simply paid out of new investor money.

“Woods and Southport preyed upon their clients' fears of losing their hard-earned savings and convinced them to place millions of dollars into a Ponzi scheme by falsely promising them a safe investment with steady returns,”said Nekia Hackworth Jones, Director of the SEC's Atlanta Regional Office.

The United States District Court for the Northern District of Georgia has granted a temporary restraining order and asset freeze with respect to defendants Woods and Horizon and ordered expedited discovery with respect to Southport, among other relief.