The Securities and Exchange Commission (SEC) has barred a Texas financial advisor after it found that she steered investors into the Woodbridge Group of Companies Ponzi scheme.
Kim Butler was the former owner Prosperity Economics Partners, a now-defunct RIA that had been based in a rural Texas town memorably named Mount Enterprise. According to the SEC, Gordon made roughly $2.9m in commissions between May of 2015 and December of 2020 by soliciting her clients to investment in Woodbridge and four other private companies without disclosing her incentives. These incentives granted her ‘a percentage of the price the investors paid to purchase the securities,’ the SEC said.
Butler agreed to the ban without admitting or denying the SEC’s findings. She also agreed to pay a $275k fine.
The Woodbridge Group of Companies pushed promissory notes and private placements and promised they would make money through the high rates of interest, ranging from 5% to 10%, which Woodbridge would receive on loans made to third-party commercial property owners of luxury real estate developments.
The company went bankrupt in December 2017 owing $961 million in principal to investors after it missed its first interest payments on the unregistered securities.
A federal judge sentenced Woodbridge CEO Robert Shapiro to 25 years in prison in 2019 after he pleaded guilty to charges of wire and mail fraud, along with tax evasion. Prosecutors said Shapiro spent millions of investor money to fund…
