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John Ernst Allegedly Takes Part In Selling Private Securities Associated With A Massive Ponzi Scheme

By June 25, 2019 June 26th, 2019 No Comments

John Ernst was a California based securities broker. He worked in the securities industry for twenty-eight years. During his career, he was registered with eight different securities firms.

His registrations included; The Prudential Insurance Company of America (1989-1992), Pruco Securities Corporation (1989-1992), John Hancock Distributors (1992-1994), Guardian Investor Services Corporation (1994-1997), SunAmerica Securities (1997-2001), MTL Equity Products (2002-2006), ING Financial Partners (2007-2010), and Foresters Equity Services (2011-2018). He is no longer working as a registered securities broker in any fashion.

John Ernst’s publicly available FINRA BrokerCheck report shows that his career came to an end in February 2018 when he was terminated from his position at Foresters Equity Services. This termination followed allegations that he took part in selling an undisclosed private security that was part of the Woodbridge Group of Companies.

Woodbridge was a private non-traded REIT that spent five years operating as a massive billion dollar Ponzi scheme. Hundreds of securities brokers, like John Ernst, sold promissory notes to their customers with the promise that they were backed up by mortgages. However, the funds that Woodbridge received from investors was rarely issues to lenders as mortgages.

In order to get individuals to invest, brokers like John Ernst promised them annual interest rates of 5 to 8 percent that would be paid out as monthly dividends. Since Woodbridge was not generating any profit from issuing mortgages like it promised, it simply paid its monthly dividends through money coming in through new investors. This continued until the entire thing collapsed and Woodbridge filed for bankruptcy.

John Ernst allegedly sold these Woodbridge promissory notes to four member four investors, three of whom were customers of Foresters Equity Services. He did this without approval or consent from the member firm. He generated over $35,000 in commissions for himself after executing the transactions.

Due to these above mentioned allegations, John Ernst was barred by the State of Wisconsin from acting as a securities broker in any fashion for a period of thirty-six months. He was also forced to pay $13,824 in disgorgement. He was also suspended by FINRA for a period of nine months and forced to pay $5,000 in fees and $22,752 in disgorgement.

Oakes & Fosher dedicates its entire legal practice to helping investors across the nation. If you, or someone you know, have lost money investing with John Ernst, or with the Woodbridge Group of Companies, please contact Oakes & Fosher for a free and private consultation.