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Navigating FINRA Arbitration: A Closer Look at Securities Dispute Resolution

Published on: September 26, 2023 | by Iorio Altamirano

Introduction

When disputes arise between investors and brokerage firms, they are usually resolved through arbitration. The Financial Industry Regulatory Authority (FINRA) offers a streamlined and cost-effective dispute resolution forum for resolving disputes in the securities industry. In this blog post, we’ll take a deep dive into FINRA arbitration, its key features, benefits, and what you should know if you find yourself involved in a securities-related dispute.

Understanding FINRA Arbitration

Former GPB Capital Executive Pleads Guilty to Wire Fraud

Published on: June 7, 2023 | by Iorio Altamirano

On Tuesday, June 6, 2023, Jeffrey Lash, a former executive of GPB Capital Holdings, pleaded guilty to one count of wire fraud in federal court in Brooklyn, NY.

In 2021, a federal grand jury brought criminal charges against Lash, David Gentile (founder and owner of GPB Capital), and a third individual, Jeffry Schneider. The charges are related to their management of the company, which has been described as a “Ponzi-like scheme.” In February 2021, the SEC also charged GPB Capital, Ascendant Capital, and Ascendant Alternative Strategies with running a Ponzi-like scheme that raised roughly $1.7 billion from over 17,000 investors, many of whom were retirees.

The criminal complaint alleged that Mr. Gentile, Mr. Lash, and Mr. Schneider used new money invested by retail investors to cover the promised 8% returns to prior investors, yet failed to disclose the source of the distributions to investors.

GWG Holdings, Inc. Misses Deadline to File Its 2021 Annual Report with the SEC

Published on: April 1, 2022 | by Iorio Altamirano

**Update: April 20, 2022** GWG Holdings, Inc. has filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Southern District of Texas. As a result of the bankruptcy filing, all accrued principal and interest payment obligations owed to GWG L Bond investors have been halted as the case proceeds through bankruptcy court. Chapter 11 Bankruptcy cases can take anywhere from 17 months to five years for larger and more complex cases. GWG L Bond investors are encouraged to immediately contact law firm Iorio Altamirano LLP for a free and confidential consultation and to review their legal rights.

**Update: April 4, 2022** According to the Wall Street Journal, GWG Holdings, Inc. is preparing to file for Chapter 11 bankruptcy in the coming days.

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GWG L Bond Investor Update: GWG Holdings, Inc. Officially Defaults on Its Obligations to L Bond Investors – February 14, 2022

Published on: February 14, 2022 | by Iorio Altamirano

**Update: April 20, 2022** GWG Holdings, Inc. has filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Southern District of Texas. As a result of the bankruptcy filing, all accrued principal and interest payment obligations owed to GWG L Bond investors have been halted as the case proceeds through bankruptcy court. Chapter 11 Bankruptcy cases can take anywhere from 17 months to five years for larger and more complex cases. GWG L Bond investors are encouraged to immediately contact law firm Iorio Altamirano LLP for a free and confidential consultation and to review their legal rights.

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GWG L Bond Investor Update: GWG Holdings, Inc. Officially Defaults on Its Obligations to L Bond Investors – February 14, 2022

Law Firm Iorio Altamirano LLP Investigating the Sale of GWG L Bonds by Tony Barouti of Emerson Equity LLC

Published on: January 29, 2022 | by Iorio Altamirano

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.

Investor Alert: Law Firm Iorio Altamirano LLP Investigates the Sale of L Bonds by Emerson Equity LLC

Published on: January 29, 2022 | by Iorio Altamirano

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.

When to Consult a Lawyer After Sustaining Investment Losses

Published on: January 25, 2022 | by Iorio Altamirano

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.

Aegis Capital Corp. Ordered to Pay Nearly $2.7 Million for Supervisory Failures Related to Rampant Excessive and Unsuitable Trading

Published on: November 9, 2021 | by Iorio Altamirano

On November 8, 2021, the Financial Industry Regulatory Authority (“FINRA”) and Aegis Capital Corp. (“Aegis Capital”) entered into Letter of Acceptance, Waiver, and Consent No. 2016051704305 (the “AWC”). After conducting an investigation, FINRA alleged in the AWC that from July 2014 through December 2018, Aegis Capital failed to establish, maintain, and enforce a supervisory system, including written supervisory procedures (WSPs), reasonably designed to achieve compliance with the suitability requirements of FINRA Rule 2111 as it pertains to excessive trading. As a result, Aegis Capital failed to identify trading in hundreds of customer accounts that were potentially excessive and unsuitable, including trading conducted by eight Aegis Capital registered representatives in the firm’s Melville and Wall Street branches whose trading in the accounts of 31 firm customers resulted in an average annualized cost-to-equity ratio (or break-even point) of 71.6%, an average annualized turnover rate of 34.9, combined customer costs (including commissions, markups or markdowns, margin interest, and fees) of more than $2.9 million, and cumulative losses of $4.6 million.

Additionally, the FINRA AWC alleged from July 2014 to June 2019, Aegis Capital failed to establish, maintain, and enforce a supervisory system, including WSPs, reasonably designed to achieve compliance with the suitability requirements of FINRA Rule 2111 when selling leveraged, inverse, and inverse-leveraged Exchange-Traded Funds (Non-Traditional ETFs) to retail customers. As a result, Aegis Capital failed to identify customers who purchased and held Non-Traditional ETFs for extended periods of time or whose purchase was inconsistent with their recorded investment objective, risk tolerance, or finances.

Customers of Aegis Capital, including customers that have been notified that they may be receiving restitution, should consult with a securities arbitration law firm. If you or a loved one were a customer of Aegis Capital, contact New York securities arbitration law firm Iorio Altamirano LLP for a free and confidential consultation and review of your legal rights.

SEC Charges John Woods of Southport Capital With Operating $110 Million Ponzi Scheme By Selling Units of Horizon Private Equity, III, LLC

Published on: August 25, 2021 | by Iorio Altamirano

**Update: September 9, 2022** On September 6, 2022, a group of Oppenheimer customers were awarded over $36 million by a FINRA arbitration panel as compensation for their investment losses in Horizon Private Equity, III, LLC. (“Horizon”). Horizon is an alleged Ponzi scheme operated by John Woods, a broker who was registered with Oppenheimer & Co. Inc. Iorio Altamirano LLP encourages all retail investors to contact our law firm for a free and confidential consultation and to review their legal rights.

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SEC Charges John Woods of Southport Capital With Operating $110 Million Ponzi Scheme By Selling Units of Horizon Private Equity, III, LLC

World Choice Securities Broker, Thomas Stratton, Barred by FINRA – Melbourne, Florida

Published on: August 12, 2021 | by Iorio Altamirano

The Financial Industry Regulatory Authority (“FINRA”) has barred stockbroker Thomas Stratton from the securities industry for refusing to cooperate with a FINRA investigation into whether Mr. Stratton misused customer funds with respect to the sale of promissory notes related to a third party’s life insurance policy, and misrepresentation thereto. The investigation was launched after FINRA received a tip to FINRA’s Securities Helpline for Seniors.

Mr. Stratton has been associated with World Choice Securities, Inc. in Melbourne, Florida, since January 2004.

If you or a loved one were a customer of Thomas Stratton or World Choice Securities, Inc., contact New York securities arbitration law firm Iorio Altamirano LLP for a free and confidential consultation.