If you lost money investing in Woodbridge Group of Companies, you may still have legal options to recover your losses in 2026. The SEC charged Woodbridge with operating a $1.3 billion Ponzi scheme that defrauded more than 8,400 investors, many of whom were retirees who invested their life savings. While the scheme collapsed in 2017 and founder Robert Shapiro received a 25-year federal prison sentence, victims may still pursue claims against the brokers, financial advisors, and financial institutions that sold or facilitated these fraudulent investments. An experienced investment fraud lawyer can evaluate whether you have viable claims through FINRA arbitration or civil litigation.
Key Takeaways
- What happened: Woodbridge Group operated a $1.3 billion Ponzi scheme from 2012-2017, defrauding 8,400+ investors through unregistered promissory notes called First Position Commercial Mortgages
- Criminal outcome: Robert Shapiro was sentenced to 25 years in federal prison for conspiracy to commit wire fraud, mail fraud, and tax evasion
- Recovery options: Victims may file FINRA arbitration claims against brokers who sold Woodbridge products without adequate due diligence
- Third-party liability: Brokerage firms, banks, and financial advisors who enabled the fraud may be held accountable for investor losses
- Time limits apply: FINRA arbitration claims must generally be filed within six years, but time is running out for many Woodbridge victims
What Was the Woodbridge Investments Ponzi Scheme?
Woodbridge Group of Companies, LLC operated one of the largest real estate Ponzi schemes in U.S. history. Between July 2012 and December 2017, the company raised approximately $1.3 billion from investors by selling unregistered securities called First Position Commercial Mortgages (FPCMs). The scheme was headquartered in Boca Raton, Florida, and controlled by founder Robert H. Shapiro.
Woodbridge told investors their money would fund short-term commercial real estate loans to third-party borrowers at interest rates of 11-15%. Investors were promised annual returns of 5-10%, supposedly backed by first-position mortgages on the underlying properties. Marketing materials even claimed that Woodbridge would make payments to investors “even if the hard-money borrower defaults.”
In reality, the scheme was built entirely on lies. According to the SEC’s complaint, Shapiro secretly owned and controlled the approximately 275 LLCs that borrowed investor funds. These shell companies had no income or genuine ability to repay the loans. The properties pitched to investors were actually owned by Shapiro himself, not independent third-party borrowers. When investors received their promised returns, those payments came directly from new investor capital, the defining characteristic of a Ponzi scheme.
How the Woodbridge Fraud Collapsed
The Woodbridge scheme began unraveling when regulatory scrutiny intensified. State securities regulators in Pennsylvania, Michigan, Massachusetts, and Colorado initiated investigations as early as 2015. Despite these red flags, brokers and financial advisors continued selling Woodbridge products to unsuspecting investors for two more years.
In December 2017, Woodbridge ceased making payments to investors and filed for Chapter 11 bankruptcy protection in Delaware (Case No. 17-12560-KJC). Just days later, the SEC filed a civil enforcement action charging Woodbridge, Shapiro, and numerous related entities with securities fraud and the sale of unregistered securities.
The SEC alleged violations of Securities Act Sections 5(a), 5(c), and 17(a), as well as Exchange Act Sections 10(b) and 15(a) and Rule 10b-5. In January 2019, a federal court ordered Woodbridge and Shapiro to pay $1 billion in disgorgement and penalties.
The Devastating Impact on Investors
Woodbridge investors were ordinary Americans, not sophisticated financial professionals. According to court documents, at least 2,600 victims invested their retirement savings, totaling approximately $400 million. Many victims were veterans, teachers, and doctors who trusted their brokers’ recommendations. Some investors faced the prospect of losing their homes and retirement security because of this fraud.
Criminal Prosecution and Convictions
Robert H. Shapiro faced criminal prosecution in addition to SEC civil charges. In August 2019, he pleaded guilty to conspiracy to commit wire and mail fraud, as well as tax evasion. The Department of Justice characterized the Woodbridge scheme as “one of the largest investment fraud schemes ever charged in South Florida.”
Shapiro, who was 61 years old at sentencing, received a 25-year federal prison sentence. He also faced money laundering conspiracy charges. The lengthy sentence reflected the massive scale of the fraud and the devastating impact on thousands of victims.
Other participants in the scheme also faced criminal accountability. Dane Roseman and Ivan Acevedo, both from Los Angeles County, pleaded guilty to participating in the fraud. These individuals were responsible for hiring and training Woodbridge’s sales force, approving fraudulent marketing materials, and helping create the false appearance of legitimacy.
Who Can Be Held Liable for Woodbridge Losses?
While Robert Shapiro sits in federal prison, his assets have been largely depleted by the fraud itself. The best opportunity for meaningful recovery often comes from pursuing claims against third parties who enabled the scheme or failed to protect investors. An experienced Woodbridge investments lawyer can investigate potential claims against:
Broker-Dealers and Financial Advisors
Registered representatives who recommended Woodbridge investments had a duty to conduct due diligence and ensure the products were suitable for their clients. Many brokers ignored obvious red flags, including state regulatory investigations that began in 2015. One Florida broker-dealer alone earned more than $5.8 million in commissions selling Woodbridge products. These brokers may be liable for unsuitable recommendations, breach of fiduciary duty, and failure to disclose material information.
Brokerage Firms
Broker-dealers have an obligation to supervise their registered representatives and approve the products they sell. Firms that allowed brokers to sell Woodbridge investments without conducting adequate due diligence may face failure to supervise claims. In some cases, brokers engaged in “selling away” by selling unapproved securities, which can create firm liability even for products the firm never officially sanctioned.
Banks and Financial Institutions
Comerica Bank, which served as Woodbridge’s primary banking institution, reached a $54.2 million settlement with defrauded investors in December 2021. Plaintiffs alleged that Comerica processed over 10,000 suspicious internal transfers totaling $1.6 billion, continued banking Shapiro despite red flags and regulatory subpoenas, and had actual knowledge of the fraudulent scheme. The Woodbridge Liquidation Trust continues to pursue additional recovery efforts through 2024 and into 2026. Other financial institutions that facilitated the fraud may face similar claims.
Other Third Parties
Accountants who prepared fraudulent financial statements, lawyers who drafted offering documents, and promoters who recruited investors may all face liability for their roles in the scheme. These third parties often have insurance coverage and functioning businesses that can satisfy judgments, making them more attractive targets for recovery than the depleted Woodbridge estate.
FINRA Arbitration Claims for Woodbridge Investors
If you purchased Woodbridge investments through a FINRA-registered broker or investment advisor, you may be able to file an arbitration claim through FINRA Dispute Resolution. FINRA arbitration offers several advantages over traditional litigation, including faster resolution, lower costs, and specialized arbitrators who understand securities industry practices.
Woodbridge investors may assert various legal claims in FINRA arbitration, including:
| Claim Type | Legal Basis | What Must Be Proven |
|---|---|---|
| Unsuitability | FINRA Rule 2111 | Investment was inappropriate for your risk tolerance, investment objectives, or financial situation |
| Breach of Fiduciary Duty | Common Law | Advisor placed their interests above yours or failed to act in your best interest |
| Due Diligence Failure | FINRA Rules | Broker failed to investigate the product before recommending it |
| Failure to Supervise | FINRA Rules | Brokerage firm failed to adequately oversee broker activities |
| Misrepresentation | State Securities Laws | Broker made false statements or omitted material facts about the investment |
| Selling Away | FINRA Rules | Broker sold unapproved securities outside firm supervision |
FINRA Arbitration vs. Court Litigation
Most brokerage account agreements require customers to resolve disputes through FINRA arbitration rather than court litigation. While this limits your choice of forum, arbitration offers potential benefits including faster resolution (typically 12-18 months versus years in court), lower discovery costs, and arbitrators with securities industry expertise. An experienced securities attorney can advise whether arbitration or another forum is best for your specific situation.
Time Limits for Woodbridge Claims
Understanding time limitations is critical for Woodbridge investors considering legal action. Different types of claims have different deadlines, and missing a filing deadline can permanently eliminate your recovery rights.
FINRA Arbitration Eligibility Rule: Under FINRA Rule 12206, no claim is eligible for arbitration if six years have elapsed from the occurrence or event giving rise to the claim. For Woodbridge investments purchased between 2012 and 2017, some claims may already be approaching or past this deadline.
State Statutes of Limitations: State law claims for fraud, breach of fiduciary duty, or negligence typically have shorter limitation periods ranging from two to four years depending on the state. These deadlines often run from when you discovered (or should have discovered) the fraud.
Federal Securities Claims: Under Section 10(b) of the Securities Exchange Act, investors generally have two years from discovery and no more than five years from the violation to file claims.
Why Time is Running Out: The Woodbridge bankruptcy was filed in December 2017, and the SEC action followed immediately. As of 2025, more than seven years have passed since the collapse, meaning some claims may already be time-barred. However, investors who discovered the fraud later or have claims based on subsequent events may still have viable options. If you have not yet explored your legal options, you should consult a Woodbridge investments lawyer immediately to preserve your rights.
What Damages Can Woodbridge Investors Recover?
Successful claims against brokers, brokerage firms, and other third parties may result in various types of compensation:
Principal Investment
Recovery of your original investment amount, less any distributions or returns you received.
Lost Opportunity
Compensation for returns you would have earned had your money been properly invested in suitable alternatives.
Interest
Pre-judgment and post-judgment interest on your losses from the date of investment to the date of recovery.
In cases involving egregious misconduct, you may also be entitled to punitive damages (in court cases) or attorney’s fees. However, recovery is never guaranteed, and actual amounts depend on the strength of your claims and the assets available from responsible parties.
Broker Due Diligence Failures
A central issue in Woodbridge cases is whether the brokers who sold these products conducted adequate due diligence. Under FINRA rules, registered representatives must have a reasonable basis for believing any recommended investment is suitable for at least some investors. This requires conducting independent research on the investment and its promoters.
Multiple red flags should have alerted diligent brokers to problems with Woodbridge:
- State regulatory investigations: Securities regulators in multiple states began investigating Woodbridge as early as 2015, two years before the collapse
- Unregistered securities: Woodbridge FPCMs were not registered with the SEC or state regulators, a significant compliance concern
- Unrealistic return promises: Guaranteed 5-10% returns regardless of market conditions should raise immediate suspicion
- Complex structure: The multi-layered LLC structure obscured the true nature of the investments
- High commissions: Brokers received substantial commissions, creating conflicts of interest
Brokers who simply relied on Woodbridge’s marketing materials without conducting independent investigation may have violated their duties to clients. The FINRA suitability rule requires more than blind acceptance of an issuer’s claims.
Why Choose Varnavides Law for Woodbridge Cases
Recovering losses from complex investment frauds like Woodbridge requires attorneys with specific expertise in securities law, FINRA arbitration, and broker-dealer operations. At Varnavides Law, we bring a unique perspective to investor representation: our founding attorney spent a decade defending broker-dealers at a major securities litigation firm before transitioning to investor advocacy.
This inside knowledge of how brokerage firms operate and defend claims provides significant advantages when pursuing recovery for defrauded investors. We understand the compliance systems that should have detected red flags, the supervisory obligations that firms often neglect, and the documentation that can prove or disprove due diligence.
Our approach to Woodbridge cases focuses on thorough investigation to identify all potentially responsible parties. We analyze your account records, the broker’s due diligence file, the firm’s supervisory procedures, and the timeline of regulatory warnings. This comprehensive analysis helps maximize recovery potential by pursuing all viable claims.
Steps to Take If You Lost Money in Woodbridge
If you invested in Woodbridge Group of Companies and have not yet pursued legal recovery, consider taking these steps:
Gather your documentation: Collect all account statements, trade confirmations, promotional materials, and correspondence with your broker or financial advisor. These documents are essential for evaluating your claims.
Calculate your losses: Determine exactly how much you invested and how much you received back in distributions or through the bankruptcy process. Your net loss forms the basis for any recovery claim.
Identify your broker and firm: Confirm the name of the broker who recommended the investment and the brokerage firm they were affiliated with. This information determines where you can file claims.
Consult a securities attorney: Time limits make prompt action essential. An experienced Woodbridge investments lawyer can evaluate your situation, explain your options, and help you understand whether FINRA arbitration, civil litigation, or other remedies are available.
Do not delay: Every day that passes brings you closer to potential statute of limitations deadlines. While some Woodbridge claims may already be time-barred, others may still be viable depending on when you invested and when you discovered the fraud.
Frequently Asked Questions About Woodbridge Investment Recovery
Is it too late to file a claim for Woodbridge investment losses?
It depends on when you invested and the specific claims available. FINRA arbitration generally has a six-year eligibility rule, meaning claims must be filed within six years of the event giving rise to the claim. Since Woodbridge collapsed in December 2017, some claims may be approaching or past this deadline. However, the deadline may run from when you discovered (or should have discovered) the fraud rather than when you made the investment. State law claims have varying deadlines. You should consult a securities attorney immediately to evaluate whether your claims remain viable.
Can I sue my broker for recommending Woodbridge investments?
If your broker recommended Woodbridge investments without conducting adequate due diligence or despite knowing about regulatory red flags, you may have claims for unsuitability, breach of fiduciary duty, negligence, or fraud. Most brokerage account agreements require disputes to be resolved through FINRA arbitration rather than court lawsuits. An experienced securities attorney can review your broker’s conduct and advise whether you have viable claims.
What happened to the money I invested in Woodbridge?
According to SEC findings, investor money was used primarily to pay fake “returns” to earlier investors, pay commissions to brokers and salespeople, and fund Robert Shapiro’s personal lifestyle. The scheme was a classic Ponzi structure where new money funded old obligations until it inevitably collapsed. The Woodbridge Liquidation Trust has been working to recover assets and make distributions to creditors, but most investors will not recover their full investment through the bankruptcy process alone.
Why would my broker be responsible for a Ponzi scheme run by someone else?
Your broker had independent legal duties to you regardless of what Woodbridge was doing. FINRA rules require brokers to conduct due diligence before recommending investments, ensure recommendations are suitable for each client’s situation, and disclose material risks. A broker who failed to investigate Woodbridge, ignored red flags like state regulatory investigations, or recommended an unsuitable high-risk investment may be liable for resulting losses even if they did not participate in the fraud itself.
How much does it cost to hire a Woodbridge investments lawyer?
Most securities attorneys who represent investors handle FINRA arbitration cases on a contingency fee basis, meaning you pay attorney fees only if you recover money. Specific fee arrangements vary and should be discussed during your consultation. Some case costs may apply regardless of outcome. Contact us to discuss your case and fee arrangement during a free consultation.
What is the Comerica Bank settlement and am I eligible?
In December 2021, a federal court approved a $54.2 million settlement between Woodbridge investors and Comerica Bank, which served as Woodbridge’s primary banking institution. The settlement resolved claims that Comerica aided the fraud by processing suspicious transactions and continuing to bank Shapiro despite red flags. If you were a Woodbridge investor and have not previously participated in this settlement, you may want to investigate your eligibility. This settlement does not affect your potential claims against brokers or other third parties.
What should I bring to a consultation about my Woodbridge investment?
Bring all documentation related to your investment, including account statements, trade confirmations, promotional materials you received, any correspondence with your broker or financial advisor, and records of any distributions you received. Also bring information about the broker and firm that recommended the investment, and be prepared to discuss when and why you decided to invest.
Take Action to Protect Your Rights
The Woodbridge Ponzi scheme devastated thousands of investors who trusted their brokers and financial advisors. While the criminal justice system has held Robert Shapiro accountable, many victims have yet to pursue recovery from the brokers and firms that sold these fraudulent investments. With time limitations threatening to eliminate remaining claims, Woodbridge investors should evaluate their legal options promptly.
At Varnavides Law, we have the securities litigation experience and knowledge of broker-dealer operations needed to effectively pursue Woodbridge investment recovery claims. We understand both sides of these disputes and use that knowledge to advocate aggressively for our investor clients.
Lost Money in Woodbridge Investments?
If you invested in Woodbridge Group of Companies through a broker or financial advisor, you may have claims to recover your losses. Time limits apply, so do not delay. Contact Varnavides Law for a free consultation to discuss your Woodbridge investment losses and legal options.
