Nov. 3—A Georgia man best known as an investor in the Chattanooga Lookouts is denying allegations by federal regulators of running a Ponzi scheme and bilking more than 400 investors, and he’s asking for a jury trial in the case.
Answering a complaint filed in federal court in August, attorneys for John J. Woods denied the six counts of securities fraud leveled by the U.S. Securities and Exchange Commission. The allegations involve $110 million the agency claims he collected from investors with little prospect of paying them back.
Woods, an investor in the Lookouts and a number of other entities in Chattanooga, acted “in honest and reasonable reliance on the advice and experience of others, including legal professionals, as to matters within the area of their expertise and experience,” his lawyers said.
But Woods’ attorneys admit he didn’t tell all investors in the Horizon Private Equity III fund that their money would or could be used to make payments to earlier investors for interest or return of principal.
Woods told certain investors that Horizon would pay a fixed rate of return and that they could get their principal back without penalty subject to a waiting period, said attorneys Stephen Councill and David Chaiken of Atlanta.
However, the Marietta, Georgia, man denied allegations that when soliciting investors, he told them the investments were “very safe,” his attorneys said.
“Defendant denies that he has been running a Ponzi scheme — including a massive and ongoing…