The U.S. Securities and Exchange Commission on Wednesday filed an action to enforce subpoenas against 235 companies as part of an investigation into possible securities fraud at the Woodbridge Group of Companies, which has received over $1 billion in investor funds.

The SEC said in the filing that the companies are believed to be affiliated with Woodbridge and may be owned or controlled by the group's president, Robert Shapiro. The companies failed to meet an Aug. 31 deadline for producing the subpoenaed records, according to the commission.

The commission filed its enforcement action in U.S. District Court for the Southern District of Florida, where it said the investigation is occurring. The Better Business Bureau for Southeast Florida lists Woodbridge and Shapiro as having an accredited office in Boca Raton that buys structured settlements.

Woodbridge said in statement on Nov. 6, “Woodbridge Group of Companies has cooperated, and will continue to cooperate, with the Securities and Exchange Commission's exceedingly broad request for documents. As of today, we have provided in excess of four million pages of documents to the agency in response to its requests.” The statement continued, “Woodbridge, in its years of dealing with a multitude of regulators, has never been found to have engaged in any fraud, and has never settled a matter that included such a charge.  Woodbridge stands squarely behind its business model, and its investors and lenders.”

Such a large number of subpoenas is highly unusual in an SEC investigation.

“This is an extraordinary number of subpoenas. At the commission, I never heard of any team doing so many,” said attorney Jordan Thomas, who is not involved in the case. Thomas, now head of the whistleblower practice at Labaton Sucharow, previously served as assistant chief litigation counsel and later assistant director of the SEC's Division of Enforcement.

The commission said in its filing that the 235 limited liability companies are not cooperating with the fraud investigation and that Shapiro has asserted his Fifth Amendment right not to speak to investigators. It said the companies are registered in either Colorado or Delaware, which do not make corporate ownership records public.

The SEC said that only the information sought by the subpoenas can “definitively establish the ownership structure” and help the commission understand the flow of money in the investigation.

Specifically, the SEC said it is investigating the offer and sale of unregistered securities, the sale of securities by unregistered brokers, and the commission of fraud in connection with the offer, purchase and sale of securities. The commission wants to know “the identity of who formed the LLCs, who owns them, and whether there has been any transfer of money from the LLCs to Woodbridge.” It said Shapiro has signed documents on behalf of the LLCs as the manager.

The SEC said among the financial products offered by Woodbridge is a first position commercial mortgage, described as “a private third party loan to Woodbridge [which] provides higher returns with shorter terms secured by commercial real estate.” Each time a property is purchased by Woodbridge for its inventory, another LLC is formed, according to the SEC.

Ken Yormark, newly hired managing director and head of U.S. forensic accounting at K2 Intelligence, handles corruption and securities investigations for a variety of industries. K2, he said, helps corporations and high-wealth individuals caught up in such legal matters.

He said if he were advising a company being investigated by the SEC, he would see “if there were glaring insufficiencies in the compliance procedures or controls, and make every effort to remediate those as soon as possible.”

He said based on the SEC's filing, “I would be concerned about how the internal accounting is being done, how the reporting is done, and what [information] is going out to investors.”

As for investors, whether companies or individuals, he recommended that they know with whom they are investing by researching the organization thoroughly. “Understand its philosophies and really do proper due diligence so you are comfortable in that environment,” he explained.

This story has been updated to include comment from Woodbridge.