by Structured Settlement Watchdog
According to a Consent Agreement and Order, in or about January 2014 through August 2015, at least one Pennsylvania individual (PA Individual), representing Woodbridge Structured Funding LLC and affiliates of Woodbridge, attempted to effect purchases or sales of securities issued by Woodbridge and affiliates of Woodbridge in Pennsylvania for compensation, and although the PA Individual was not an officer or employee of Woodbridge, the PA Individual was neither registered pursuant to Section 301 of the 1972 Act, 70 P.S. §1-301 nor exempt from registration as an agent for Woodbridge or affiliates of Woodbridge.
The Commonwealth of Pennsylvania, acting through the Department of Banking and Securities, Bureau of Securities Compliance and Examination conducted an investigation of the business practices of Woodbridge Structured Funding, LLC its affiliates and products and its officers, employees and agents. Based on the results of its investigation the Bureau concluded that Woodbridge operated in violation of the Pennsylvania Securities Act of 1972 , 70 P.S. §1-101 et seq. The violation was that Woodbridge employed at least one unregistered agent in violation of 70 P.S. §1-301(b). Woodbridge Structured Funding was fined $30,000.00
The Consent Order made clear that Woodbridge voluntarily entered into the Consent Order and that the Order is not intended to disqualify Woodbridge from any business that otherwise are qualified, licensed or permitted to perform under applicable law in Pennsylvania., The US, or any other state.
Source: Commonwealth of Pennsylvania Department of Banking an Securities Compliance and Examinations v Woodbridge Structured Funding, LLC Docket 17-0008 (SEC-OSC) April 24, 2017.
Pennsylvania Statutes Title 70 P.S. Securities § 1-301 § 1-301. Registration requirement
(b) It is unlawful for any broker-dealer or issuer to employ an agent to represent him in this State unless the agent is registered under this act. The registration of an agent is not effective during any period when he is not associated with a specified broker-dealer registered under this act or a specified issuer. No agent shall at any time represent more than one broker-dealer or issuer, except that where affiliated organizations are registered broker-dealers, an agent may represent one or more of such organizations. When an agent begins or terminates an affiliation with a broker-dealer or issuer, or engages in activities which make him an agent, the agent as well as the broker-dealer or issuer shall promptly notify the department. The department may adopt a temporary registration procedure to permit agents to change employers without suspension of their registrations hereunder.
In February 2016, Woodbridge Structured Funding launched a successor company Woodbridge Wealth. The company sells First Position Commercial Mortgagees, "Secondary Market Annuities" and Bridge Loan Funds. What some call " Secondary Market Annuities" are not annuities.
Does the action of the Pennsylvania securities regulator open the door to greater regulation of how structured settlement derivatives are sold to investors? We'll have to wait and see.
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