This article was originally published by AspenTimes.com
Woodbridge Realty’s office in Aspen Glen, where the company holds numerous lots and listings, is closing.
“Woodbridge will close the sales office at the end of the month,” the company said in an emailed statement. “Our remaining properties will be listed with local brokers. We will continue to sell, hold and develop land in Aspen Glen, based on market conditions.”
The development coincides with news that the company is under a fraud investigation by the U.S. Securities and Exchange Commission.
The Glenwood Springs Post Independent also learned Friday that Colorado is one of at least six states now where the company has been accused of securities violations. On Oct. 12, the Colorado Securities commissioner ordered Woodbridge to “show cause as to why he should not issue a sanction against them for Colorado Securities Act violations.”
“To date, the division alleges that (Woodbridge has) raised approximately $57 million from 450 Colorado investors, and (continues) to solicit investors through online and radio advertising.” —Colorado Division of Securities
Colorado joins a list of states where, in the last two years, Woodbridge has been accused of securities violations related to sale of unregistered securities. As previously reported, the firm has faced similar litigation in Massachusetts, Texas, Pennsylvania, Michigan and Arizona. The Colorado securities division’s allegations are practically identical to those in the other five states.
According to the securities commissioner’s order, the Colorado filing “alleges that in the pursuit of these investments, the respondents and their agents have made misleading statements to investors regarding: the lack of proper registration and licensure; qualifications of the fund managers; the company’s ability to pay back investors should the loans default; the risk involved in the investments; and the fact that the Woodbridge Funds and companies have already been sanctioned by securities divisions in Massachusetts and Texas for similar violations.”
The Colorado securities division’s order also called out three Front Range sales agents, who the division accused of having sold the company’s unregistered securities and omitted material facts to investors.
“Woodbridge made these sales to Colorado investors using at least 10 other sales representatives, none of whom were licensed to sell securities in Colorado,” according to the Colorado filing.
“To date, the division alleges that (Woodbridge has) raised approximately $57 million from 450 Colorado investors, and (continues) to solicit investors through online and radio advertising,” according to the securities division.
Robert Shapiro, president of Woodbridge, said by email that the company has settled three of these state cases, in Pennsylvania, Texas and Massachusetts, with no admission of guilty or finding of fraud, while discussions in the other cases are ongoing. And he emphasized that the SEC has so far not concluded that Woodbridge or any affiliated individual has violated federal securities laws.
The SEC for the past year has been investigating whether Woodbridge, which has “raised more than $1 billion from several thousand investors nationwide,” has been defrauding its investors.
What type of fraud the SEC suspects is not completely clear. But the agency has subpoenaed both Woodbridge and 235 LLCs affiliated with Woodbridge. The SEC says these companies are “interwoven into the structure of the products Woodbridge offers for investment” and the agency believes these companies are owned or otherwise controlled by Shapiro.
It’s unclear whether these developments will register as a big impact locally, despite Woodbridge’s outsized presence in Roaring Fork Valley real estate.
Sean de Moraes, an agent with Roaring Fork Sotheby’s International Realty, said he didn’t expect events surrounding Woodbridge to affect the local real estate market.
“Any immediate negative impact on a specific market segment will only be a ripple in the long-term values of estate in our valley,” he said. “Simply put, in the end, there are buyers and there are sellers, property will continue to change hands just as it always has at prices that both parties agree on, and that will always be the true value of a property.”