Title: SEC Charges unregistered investment advisor with running Ponzi Scheme
Date: March 1, 2020
Litigation release No. 25654/March 1, 2023
Stephen Keith Woodard Sr. Securities and Exchange Commission, No. No. 1:23-cv-0112 (D. Hawaii, filed Mar. 1, 2023)
The Securities and Exchange Commission announced charges on March 1, 2023 against Stephen Keith Woodard Sr., a non-registered investment advisor. Woodard has been accused of operating a Ponzi scam, which he allegedly targeted more than two dozen people, most of whom he approached via his parish.
According to the SEC complaint, Woodard raised $6 million between mid-2016 and mid-2021 through the sale of promissory note issued by Morganwood Ltd. a company that he controls. Woodard allegedly deceived some of his clients and investors by claiming that he used a trading strategy with no risk that produced impressive returns, while still preserving their capital. The complaint claims that Woodard only invested a small part of the money and made increasingly risky wagers, which resulted in substantial losses.
Woodard is also accused of using investor funds for phantom returns instead of disclosing the mounting losses he was experiencing in his trading. Woodard also gave investors false account statements, claiming that their investments had made illusory profits.
The SEC filed a complaint with the federal district court of Hawaii charging Woodard of violating several provisions of securities law, including the antifraud provisions of the Securities Act of 1932, the Securities Exchange Act of 1935, and Investment Advisers Act of 1980. The SEC is seeking a permanent injunction as well as disgorgement and prejudgment interests, along with a civil penalty.
Peter Del Greco conducted the investigation for the SEC under the supervision Marc Blau of the Los Angeles Regional Office. Stephen Kam will lead the litigation.
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Securities and Exchange Commission, or SEC, is an American regulatory agency that enforces federal securities laws and regulates the securities industry. Its primary goal is to protect investors and maintain fair, efficient, and transparent markets.
The SEC supervises various participants on the securities market including brokers, investment advisers, mutual funds, and securities exchanges. It ensures these entities are in compliance with the laws and regulations that promote transparency, protect against fraud and maintain market integrity.
The SEC plays an important role in enforcing requirements for disclosure, making sure that companies give accurate and timely information. The SEC is responsible for ensuring that financial statements, prospectuses, as well as other disclosures relevant to investors, are accurate and timely.
SEC can also bring enforcement actions, in addition to its regulatory function, against individuals or companies that violate securities law. It conducts investigations, takes legal action, and, if necessary, imposes sanctions or penalties.
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