Former VOYA Broker Subject of Ten Customer Disputes for Illiquid Alternative Products
According to publicly available information, former financial advisor Ashley Woodard (Woodard, CRD# 4703144) of Greenville, SC, has been named or otherwise involved in a total of ten customer disputes. As disclosed through FINRA BrokerCheck, seven of these disputes resulted in an aggregate settlement amount of $1,797,500, and generally concern allegations that Mr. Woodard purportedly recommended investments in “various alternative, illiquid and unsuitable securities” including various private placement investments. As of this writing, two customer disputes remain pending, with each matter seeking in excess of $5 million in damages.
The products involved in the various customer disputes concerning Mr. Woodard primarily include illiquid and complex private placement investment offerings. The majority of private placements are offered under an exemption from registration requirements for securities known as SEC Regulation D (“Reg D”). Among other things, Reg D provides a safe-harbor exemption to the requirement for securities registration, and further specifies the amount of money that can be raised during a specific offering, as well as the type of investor (typically, accredited investors) who may be solicited to invest in such non-public offerings.
Unfortunately, investing in private placements is often very complex and can be fraught with risk. To begin, investors typically only receive very limited information about the underlying company or business operations when investing in private, unregistered securities. In this regard, investors will often only receive a Private Placement Memorandum (PPM) or other limited offering documents, and perhaps unaudited financials surrounding the investment opportunity. Beyond the limited information usually associated with investing in private placements, investing in private securities presents significant liquidity risk. Securities acquired in a private placement are usually deemed “restricted”, meaning that investors cannot resell them without registration (or an applicable exemption) under the securities laws.
Under prevailing securities rules, as set forth by both the SEC and FINRA, a brokerage firm is obligated to conduct due diligence on any investment before it is recommended, in order to understand the investment and its risk components, as well as to ascertain any red flags. By extension, and as part of this due diligence requirement, a broker-dealer and financial advisor must make reasonable efforts to gather and analyze information about the investment, including the issuer, its management, financial condition, and the intended use of proceeds raised through an offering. In instances where a brokerage firm and/or financial advisor fail to conduct adequate due diligence, then they may be held liable for losses suffered by investors.
The attorneys at Giarrusso Law Group LLC have significant experience in working closely with investors to resolve all manner of issues concerning investment losses, including losses suffered due to misconduct or negligence by a broker or financial advisor. Investors may pursue a claim to recover monies through securities arbitration before the Financial Industry Regulatory Authority (FINRA), or in some instances, through litigation. Investors who wish to discuss a possible claim are invited to contact us by telephone at (201) 771-1115 or by email at info@gialawgroup.com for a no-cost, confidential consultation.