Articles Tagged with Wieniewitz Financial

Attorney Scott Silver was quoted in an article from Investment News regarding the recent bankruptcy filing by small business merchant service company 1^st Global Capital, and a sister company, 1 West Capital.

Prior to the bankruptcy, the SEC and the US Attorney’s office in the Southern District of Florida opened similar investigations into the companies. Court documents indicate that the companies used “independent sales organizations, underwriters and other funding agents” to find and secure investors. Once the investigations began, the company could no longer raise capital, and filed for Chapter 11 bankruptcy to protect assets and continue the business. (Another company called 1^st Global, located in Dallas, is unrelated.)

Mr. Silver notes that the 1^st Global case is “eerily similar” to a prior case, a Ponzi scheme by a company called Woodbridge. That company was charged in December, as well as its founder, Robert Shapiro. That scheme was worth $1.2 billion, and targeted 8,400 investors. Mr. Silver sees 1^st Capital as “following the Woodbridge model,” using unregistered brokers nationwide to sell to investors.  It’s clear, Mr. Silver says, that investors, who are mostly mom-and-pop, will not be receiving any distributions. They’ve been left without the promised income, and wondering how much of their principal will be lost in the bankruptcy.