Horizon Private Equity III Ponzi Scheme Update 2025

John Woods Sentenced for Horizon Ponzi Scheme that Defrauded Investors

The White Law Group continues to investigate potential securities claims involving Horizon Private Equity Fund III.

Former investment advisor John J. Woods has reportedly been sentenced on February 8th to nearly eight years in prison for running a 13-year Ponzi scheme that defrauded over 400 investors of more than $49 million. Woods, based in Atlanta, was the president of Southport Capital and managed Horizon Private Equity III. He was also reportedly a minority owner of the Chattanooga Lookouts, a stake he allegedly purchased using fraudulently obtained funds.

Woods purportedly lured investors, including retirees and veterans, by falsely promising 6-7% returns on supposedly low-risk investments. Instead, he allegedly used new investor funds to pay existing clients and fabricated monthly statements to hide losses. By 2021, Horizon investors were reportedly owed over $110 million, prompting SEC intervention.

Regulators later barred Woods, and FINRA ordered his former employer, Oppenheimer & Co., to pay over $35 million to victims for failing to prevent his misconduct. Woods’ restitution amount will be determined at an April 14 hearing.

SEC Charges 3 more Advisors in Horizon Ponzi-Scheme  

According to a litigation release on June 14, 2022, the Securities and Exchange Commission filed a civil action in a Georgia district court against investment advisors Michael Mooney, Britt Wright, and Penny Flippen in connection with their alleged participation in the purported Ponzi scheme.

The former investment advisors who were reportedly affiliated with Livingston Group Asset Management Company (Southport Capital), purportedly recommended that their clients invest at least $62 million in Horizon Private Equity III, a private fund allegedly controlled by Southport’s former owner and manager.   

In August 2021, the SEC reportedly charged the former manager and Southport with multiple counts of securities fraud involving the alleged Horizon Ponzi scheme. (See: Horizon Private Equity III Investors Lawsuits – SEC Charges Southport with $110 Million Ponzi…)  

Elderly, Inexperienced Investors

The charges claim that the defendants’ clients were “elderly and inexperienced investors” who were looking for “safe investment opportunities” for their assets, a large percentage of which were earmarked for retirement.  

The defendants purportedly recommended that their clients invest in the fund based solely on the former manager’s unsubstantiated claims about Horizon’s investment objectives, source of returns, and operations. The complaint further alleged that the representatives ignored “significant red flags,” such as when the manager allegedly instructed the defendants not to use their Southport email addresses when communicating about the Horizon fund.  

Guaranteed Rates of Return

According to the SEC, the defendants allegedly told their clients that Horizon would use their funds to purchase safe investments; that Horizon would pay them a guaranteed rate of return of 6 percent to 8 percent; and that they could get their principal back without penalty.  

Instead, Horizon purportedly earned very few profits from investments, and investor proceeds were used primarily to make principal and interest payments to earlier investors and to fund the former manager’s personal projects, such as his alleged purchase of a minor league baseball team.  

The complaint reportedly charges Mooney, Wright, and Flippen with violating the antifraud provisions of various federal securities laws, as well as aiding and abetting Southport, and Horizon and its former manager.  

The SEC seeks injunctive relief, disgorgement plus prejudgment interest, and civil penalties.

Broker Misconduct and FINRA Arbitration

Broker misconduct occurs when financial advisors engage in unethical or fraudulent practices, such as misrepresenting investments, unauthorized trading, or misusing client funds. FINRA-registered broker-dealers have a duty to supervise their brokers to prevent such misconduct.

If the firm fails to supervise its brokers properly, it can be held liable through FINRA arbitration. Investors who suffer losses due to a broker’s misconduct can file a claim against both the broker and the firm, alleging failure to supervise. If a firm neglects this duty, it may be ordered to compensate the affected investor through an arbitration award.

Class Action Lawsuit vs. Individual FINRA Arbitration Lawsuit

You may wonder whether a large class action lawsuit is a better litigation option  than an individual FINRA arbitration case.  The answer depends on many factors, but typically if the loss sustained is large (say larger than $100,000), an individual arbitration claim is likely a better option.  Class actions as a recovery option are more appropriate for grouping large numbers of individuals who have small claims – too small to generally pursue individually.

Lawsuits to Recover Financial Losses    

This information is all publicly available and provided to you by the White Law Group. If you have suffered investment losses in the Horizon Ponzi scheme, the White Law Group may be able to help you. For a free consultation with a securities attorney, please call The White Law Group at (888) 637-5510.        

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Seattle, Washington.