Articles Posted in FINRA

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Investor advocate law firm Iorio Altamirano LLP is investigating potential securities arbitration claims against Centaurus Financial, Inc. for its sale of L Bonds issued by GWG Holdings, Inc. Upon information and belief, Centaurus Financial, Inc. was a part of Emerson Equity LLC’s network of broker-dealers who sold the speculative, high-risk, and illiquid “L Bonds” issued by GWG Holdings. 

On April 20, 2022, GWG Holdings, Inc. filed for Chapter 11 bankruptcy. Despite the unwelcomed news, GWG L Bond investors can file individual arbitration claims to recover losses from the brokerage firm that sold them these speculative bonds.  Brokerage firms, like Centaurus Financial, Inc., are required to make investment recommendations that are suitable and in the best interest of their customers.  Brokerage firms and financial advisors must also disclose all material facts and risks of a security when making a recommendation. When a firm or advisor fails to meet these standards of conduct, they can be held liable for damages.

Firms and brokers are also required to conduct reasonable due diligence on products they offer before recommending them to any clients. There are serious concerns that some broker-dealers failed to understand the material risks and features of GWG L Bonds.  For example, in April 2020, Centaurus Financial raised the cap on how much the firm would allow customers to purchase despite GWG’s significant departure from the life settlements business and its foray into a risker alternative asset business, making it a much larger credit risk. The limit was raised from $100,000 to $150,000, or no more than 10% of the customer’s net worth (excluding primary residence), whichever is less.  August Iorio, a managing partner of Iorio Altamirano LLP, was recently quoted in Investment News about Centaurus Financials’ remarkable decision.

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Prominent securities arbitration law firm Iorio Altamirano LLP is investigating the sales practices of broker Tony Barouti connected with his recommendation of L Bonds issued by GWG Holdings, Inc. to senior and elderly customers.  Mr. Barouti is registered as a broker with Emerson Equity LLC in Los Angeles, CA, and is the CEO of Barouti Financial Services, LLC.

Iorio Altamirano LLP has been contacted by numerous senior and elderly retail investors who were recommended and sold GWG’s L Bonds by Mr. Barouti.  GWG’s L Bonds are speculative, high-risk, and illiquid securities that were sold as private placement offerings.  Brokerage firms received a commission of up to 5% of the principal amount sold.

On January 15, 2022, GWG Holdings Inc. missed interest and principal payments to L bond investors. The company is also reportedly seeking rescue financing in an effort to avoid bankruptcy after facing a series of accounting issues, financial stress, and an SEC investigation. In addition, GWG’s independent auditor resigned at the end of 2021, and the company has disclosed that its 2021 financials are not likely to be completed on time.  These are just a few recent developments that have GWG L Bond investors concerned.

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New York securities arbitration law firm Iorio Altamirano LLP is investigating potential securities arbitration claims against Emerson Equity LLC and its network of broker-dealers for their sale of L Bonds issued by GWG Holdings, Inc. (Nasdaq: GWGH).

On January 15, 2022, GWG Holdings Inc., a company known for selling life-insurance bonds, missed interest and principal payments to L bond investors. The company is also reportedly seeking rescue financing in an effort to avoid bankruptcy after facing a series of accounting issues, financial stress, and an SEC investigation.

GWG’s L Bonds are speculative, high-risk, and illiquid securities that were sold as private placement offerings.

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In an annual report more than two decades ago, Warren Buffett dispensed some wise words of knowledge: “You only find out who is swimming naked when the tide goes out.” Reportedly, Mr. Buffett was referring to knowing what risks a company is taking until it faces adverse conditions.  Mr. Buffett used the same phrase again in 2008 about the foolishness of large financial institutions exposed by falling home prices.

Mr. Buffett’s words of wisdom can also be applied to investment recommendations made by a financial advisor in a bull market.  Almost everyone looks like a genius in a booming market, including financial advisors.  However, when the stock market enters into a correction, or something even more dreadful, the real risks of an investment or investment strategy are exposed, often leaving a trail of investment losses in their wake.

Investors who have suffered investment losses due to unsuitable or misleading investment recommendations by brokers or brokerage firms should consult with a lawyer to review their legal rights.

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Partners August M. Iorio and Jorge Altamirano discuss Iorio Altamirano LLP’s groundbreaking arbitration award against Robinhood over the January 2021 trading restrictions and what the award may mean for retail investors.

Q&A:

When was the arbitration claim that led to the award filed?

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FINRA has suspended Joseph Scott Audia, formerly with Joseph Stone Capital L.L.C., from associating with any FINRA member in all principal capacities for two months. Audia consented to the sanctions and to the entry of findings that he failed to reasonably supervise a registered representative, who excessively and unsuitably traded certain customer accounts.

Audia’s suspension is scheduled to begin on January 18, 2022, and end on March 17, 2022. He was fined $5,000 and agreed to complete 20 hours of continuing education concerning supervisory responsibilities.

If you have been harmed by Joseph Scott Audia, or Joseph Stone Capital L.L.C., contact New York securities arbitration lawyers Iorio Altamirano LLP for a free and confidential evaluation of your account. 

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FINRA has suspended Joseph Stone Capital L.L.C. broker Todd Kling from the securities industry for three months. Kling consented to the sanction and to the entry of findings that he engaged in excessive and unsuitable trading, including the use of margin, in a senior customer’s account.

Kling’s suspension is scheduled to begin on January 18, 2022, and end on April 17, 2022.

If you have lost money with Todd Kling, or Joseph Stone Capital L.L.C., contact New York securities arbitration lawyers Iorio Altamirano LLP for a free and confidential evaluation of your account.

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FINRA has suspended Adam Maggio, with Joseph Stone Capital L.L.C., from associating with any FINRA member in all principal capacities for five months. Maggio has been registered in multiple capacities with Joseph Stone Capital L.L.C. since February 2013, including as a General Securities Principal.

Maggio consented to the sanctions and to the entry of findings that he failed to reasonably supervise trading in certain customer accounts for potentially excessive activity. His suspension is scheduled to begin on January 3, 2022, and end on June 2, 2022. He was fined $5,000 and will also undertake to attend and satisfactorily complete 20 hours of continuing education concerning supervisory responsibilities.

If you have been harmed by Adam Maggio, or Joseph Stone Capital L.L.C., contact New York securities arbitration lawyers Iorio Altamirano LLP for a free and confidential evaluation of your account. 

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FINRA has suspended Anthony Graziano, with Joseph Stone Capital L.L.C., from associating with any FINRA member in all principal capacities for three months. Graziano first became registered as a General Securities Representative and General Securities Principal with Joseph Stone Capital L.L.C. in June 2015 and subsequently became registered with the firm as a Compliance Officer in October 2018.

Graziano consented to the sanctions and to the entry of findings that he failed to reasonably supervise a registered representative of his firm, who excessively traded a customer’s account.

Graziano’s suspension is scheduled to begin on January 3, 2022, and end on April 2, 2022. He was also fined $5,000 and will undertake to attend and satisfactorily complete 20 hours of continuing education concerning supervisory responsibilities.

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FINRA has suspended Joseph Stone Capital L.L.C. broker Douglas Rosenberg from the securities industry for seven months. Rosenberg consented to the sanctions and to the entry of findings that he excessively and unsuitably traded the accounts of three customers. As a result of Rosenberg’s unsuitable recommendations, his customers suffered a total of over $154,000 in realized losses and paid a total of $89,652 in commissions, trading costs, and margin interest.

Rosenberg’s suspension is scheduled to begin on January 3, 2022, and end on August 2, 2022. He was also ordered to pay partial restitution to the three customers of $25,000.

If you have lost money with Douglas Rosenberg, or Joseph Stone Capital L.L.C., contact New York securities arbitration lawyers Iorio Altamirano LLP for a free and confidential evaluation of your account.

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