financial advisor negligence

GPB Capital Co-Founders Found Guilty of Fraud on All Accounts

Published on: August 1, 2024 | by Iorio Altamirano

Notice to GPB Capital Investors: Iorio Altamirano LLP Continues to Investigate The Sale of GPB Capital Private Placement Offerings to Retail Investors

A federal grand jury found GPB Capital Holdings co-founders David Gentile and Jeffry Schneider guilty of fraud. 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 securities issued by GPB Capital. According to authorities, the firm raised more than $1.7 billion from over 17,000 investors, many of whom were retirees.

The jury found David Gentile guilty of conspiracy to commit securities fraud, conspiracy to commit wire fraud, securities fraud, and wire fraud. Jeffrey Schneider was found guilty of securities fraud and wire fraud.

Western International Securities and LifeMark Securities Corp. Settle Alleged Regulation Best Interest Violations Related to the Sale of GWG L Bonds

Published on: August 1, 2024 | by Iorio Altamirano

What You Need to Know:

On July 31, 2024, the SEC announced that it had reached an agreement with Western International Securities and five of its registered representatives to settle an ongoing lawsuit arising out of the sale of high-risk and speculative L Bonds issued by the now-bankrupt GWG Holdings, Inc.
On July 28, 2024, the SEC fined broker-dealer LifeMark Securities Corp. for failing to comply with Regulation Best Interest connected with recommending GWG L Bonds to retail customers between July 2020 and January 2022 without exercising reasonable diligence, care, and skill to understand the potential risks, rewards, and costs associated with the recommendations.

Emerson Equity Appears to Have Paid Over $6 Million in Defending and Settling GWG L Bond Claims

Published on: February 21, 2024 | by Iorio Altamirano

In recent court filings, Emerson Equity LLC has disclosed that it has paid over $2.1 million in attorney fees and arbitration costs through January 1, 2024, to defend itself from more than 60 customer complaints related to its sale of GWG L Bonds. In addition, according to public disclosure reports for its brokers, Emerson Equity LLC has paid over $4.2 million in settlements in 2023 and the first few days of 2024.

The customer complaints are primarily FINRA securities arbitration complaints that were brought by GWG L Bond investors who were sold speculative, high-risk, illiquid, high-commission, and unrated GWG L Bonds by the firm’s brokers, including Tony Barouti. More than half of Emerson Equity’s GWG L Bond-related customer disputes arise out of recommendations made by Mr. Barouti.

Although Emerson Equity’s legal fees and settlements have surpassed $6 million, the cost represents less than one-third of the $20.1 million that the firm received from GWG Holdings Inc. for brokerage services from June 2018 through June 2022.

Iorio Altamirano LLP Investigates Ausdal Financial Partners, Inc. for the Sale of GWG L Bonds

Published on: February 20, 2024 | by Iorio Altamirano

Iorio Altamirano LLP and its experienced GWG Holdings L Bonds attorneys, representing retail investors nationwide, continue to investigate and file claims against Ausdal Financial Partners, Inc. for its sale of speculative, high-risk, illiquid, high-commission, and unrated GWG L Bonds to retail investors.

The law firm’s investigation is ongoing after three separate arbitration panels awarded investors damages in connection with the sale of L Bonds by their financial advisors and firms.

In addition to these arbitration awards, brokerage firms have settled cases with investors who have filed arbitration claims. According to our law firm’s review of public disclosure reports of individual brokers, Ausdal Financial Partners and/or its brokers have been the subject of at least 26 customer disputes connected with its sale of GWG L Bonds to retail investors. Of the 26 disclosed disputes, 12 are still pending, and 14 have been settled. The cases that have been settled have recovered an average of approximately 41% of the alleged damages, with a range of recoveries primarily between 30 and 70%. Some of these matters involved a variety of securities in addition to GWG L Bonds.

GWG L Bonds Update: GWG Wind Down Trust Files Quarterly Report (February 15, 2024)

Published on: February 15, 2024 | by Iorio Altamirano

On February 15, 2024, the GWG Wind Down Trust filed a status report with the United States Bankruptcy Court for the Southern District of Texas for the quarter ending December 31, 2023. Although the status report did not include an updated financial statement, there are several key takeaways:

The GWG Wind Down Trust has sold two of its three tangible assets for a total of approximately $10.58 million.
The sale of its life insurance policy portfolio generated $10 million in cash.

Iorio Altamirano LLP Continues to Investigate Centaurus Financial for the Sale of GWG L Bonds

Published on: November 15, 2023 | by Iorio Altamirano

Iorio Altamirano LLP and its experienced GWG Holdings L Bonds attorneys continue to investigate and file claims against Centaurus Financial for its sale of risky and speculative GWG L Bonds to mom-and-pop investors.

The law firm’s investigation is ongoing after two separate FINRA arbitration panels awarded investors damages in connection with the sale of L Bonds by their brokers and brokerage firms. In the first case, an arbitration panel in Los Angeles, California, held two brokers liable for their negligence in selling GWG L Bonds to an investor and awarded over $1 million in damages. In the second case, a FINRA arbitration panel in Boston, Massachusetts, awarded an investor $280,000 in damages, finding that brokerage firm Ages Financial Services, LTD was liable for not properly informing the investor about the risks of GWG L Bonds.

Iorio Altamirano LLP represents dozens of GWG L Bond investors across the country and encourages investors who are taking a “wait and see approach” to act now. As the GWG Wind Trustee begins to liquidate GWG’s assets, it is becoming more evident that the GWG L Bonds, now the New Series A1 WDT Interests, are nearly worthless.

“I continue to believe that the [GWG] L Bondholders will lose a very large percentage of their investments” – Bankruptcy Judge Marvin Isgur

Published on: October 6, 2023 | by Iorio Altamirano

**Update: November 1, 2023** On October 13, 2023, the GWG Wind Down Trust sold two of its four assets for only approximately $10.5 million. The GWG Wind Down Trust sold its largest tangible asset, its portfolio of life insurance policies, realizing only $10 million in cash. In addition, on October 13, 2023, the GWG Wind Down Trust sold its equity interest in Foxo Technologies, Inc. for $586,943. The $10.5 million in recovery represents approximately 0.8% of the $1.3 billion in obligations owed to L Bond investors/creditors.

Further, over the past month, the share price of Beneficent has continued to fall and is currently trading at approximately $0.60 per share.

We continue to believe that GWG L Bonds investors’ best avenue for potential recovery of losses is to file a separate FINRA arbitration claim against their brokerage firms. Iorio Altamirano LLP has already helped GWG L Bond investors recover over $1.4 million in losses.

David Lerner Associates Customers Seek Up to $1 Million in Damages for Energy 11, Energy 12, and Spirit of America Energy Fund (SOAEX) Investments

Published on: September 28, 2023 | by Iorio Altamirano

An elderly couple in their upper 80s filed a FINRA arbitration claim against David Lerner Associates, Inc. (“David Lerner Associates”) to recover losses and damages of up to $1 million. The couple, represented by securities arbitration law firm Iorio Altamirano LLP, alleges that David Lerner Associates recommended an unsuitable investment strategy to invest and concentrate a significant portion of their retirement savings and net worth into risky and high-commission energy-sector securities that were proprietary to David Lerner Associates, Inc.: (1) Energy 11, L.P. (“Energy 11”); (2) Energy Resources 12, L.P. (“Energy 12”); and the Spirit of America Energy Fund (“SOAEX”).

The arbitration claim also alleges that David Lerner Associates and its broker, Robert Rasbach, misrepresented and omitted material information about the investment strategy and the energy investments, including:

That investing in Energy 11 and Energy 12 involved a “high degree of risk” and was only appropriate for investors willing and able to assume the risk of a “speculative, illiquid, and long-term investment.”

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

GWG’s Bankruptcy Plan Goes into Effect; GWG L Bonds Canceled

Published on: August 2, 2023 | by Iorio Altamirano

On August 1, 2023, GWG Holdings, Inc.’s Chapter 11 bankruptcy plan (the “Plan”) went into effect.

As part of the Plan, GWG will be liquidated, and two liquidating trusts have been created: (i) the Wind Down Trust and (ii) the Litigation Trust.

As a result of the Plan going into effect, all securities issued by GWG, including GWG L Bonds, were canceled. L Bondholders received “New Series A1 WDT Interests” in the Wind Down Trusts.