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Real Estate Developer Woodbridge Group Files for Bankruptcy Amid SEC's Fraud Probe

  • SEC said in October it was looking at CEO’s ties to affiliates
  • Firm sells commercial mortgage stakes and Aspen properties
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Woodbridge Group of Companies LLC, a high-end real estate developer, filed for bankruptcy amid the departure of its chief executive and an investigation into potential securities fraud linked to $1 billion in investments.

The Chapter 11 filing on Monday in U.S. Bankruptcy Court in Wilmington, Delaware, cited “unforeseen costs associated with ongoing litigation and regulatory compliance.” The U.S. Securities and Exchange Commission has been probing whether Woodbridge defrauded investors who invested more than $1 billion. The agency also sought more information on about 236 limited liability companies Woodbridge formed, according to an October SEC court filing.