Category Archives: Center Street Securities

Thomas P. Smith-Former Titan Securities Broker-Discloses Customer Dispute Over Alternative Investment-Arlington, TX

April 2017-Arlington, Texas

The FINRA records of  Thomas P. Smith ,  a   stockbroker who is currently registered with Center Street Securities disclose a pending customer dispute.

The Financial Industry Regulatory Authority (FINRA) is the agency that licenses and regulates stockbrokers and brokerage firms. FINRA requires brokers and brokerage firms to report customer complaints and disputes as well as regulatory sanctions. In addition brokers are required to disclose certain financial matters such as personal bankruptcies, judgments and liens.

In currently pending FINRA case #16-3184 a customer of his prior employers Titan Securities & Newbridge Securities alleges damages of $250,000 for negligence, violations of the Texas Securities Act and other claims related to the purchase of a non-traded alternative investment.

Alternative investments include non publicly traded real estate investment trusts (REITS) , hedge funds, real estate, commodities and derivatives contracts and, managed futures. It may also include art, wine, antiques, coins or stamps. These investments tend to be complex, illiquid, nontransparent, hard to value and expensive. Many of the alternative investments sold over recent years are not traded on any public market making them difficult to value and even more difficult to liquidate if cash is needed.

 

Smith has been employed by Center Street Securities since 5/2016. He was with Titan Securities from 8/2011-6/2016 and with Newbridge Securities 6/2010-8/2011. Smith discloses a business relationship with Bering Financial in Arlington, TX.

If you have losses in an account in an account handled by Thomas P. Smithcontact us to discuss how you may be able to recover damages for those losses.

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.

Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

Stock Broker Sanctioned for Sale of GWG Debentures to Retirees

February 29, 2016- Phoenix, AZ

The Financial Industry Regulatory Authority (FINRA) barred Phoenix based broker David Joseph Escarcega for making unsuitable recommendations involving debentures to customers, many of whom were elderly.  In addition he was fined over $52,000.  See Disciplinary Proceeding 2012034936005.

The debentures included GWG Debentures. The prospectus for the GWG Debentures contains 30 separate risks including the following:

  • GWG had a limited operating history and had never made a profit. In 2009 and 2010, it had combined losses exceeding $5 million. The May 2012 Prospectus disclosed that GWG had a net loss of over $2.8 million for the year ending December 31, 2011.
  • Because GWG relied primarily on debt to finance its operations, an inability to continue to borrow could affect its business .
  • The Debentures are illiquid so investors would be unable to quickly re-sell their Debentures in the event they needed access to principal.
  • Changes in actuarial assumptions concerning the life expectancy of insureds could affect GWG’s cash flow and its ability to service payments on the Debentures.
  • Holders of Debentures likely could not recover their principal in the event of a default because the Debentures are subordinate to all other senior debt GWG has incurred.

According to FINRA records, Escarcega was last registered with Center Street Securities since 3/2010.

If you have losses on GWG debentures contact us to discuss how you may be entitled to recover damages.

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.

Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

GWG Renewable Secured Debentures/ GWG Notes-Regulator Takes Action

A search of the FINRA Disciplinary proceedings, as of December 3, 2014, reveals that the  following actions involving GWG Renewable Secured Debentures have been brought by FINRA against the named brokerage firm and/or broker(s):

  • 10/20/2013- Wall Street Strategies, Garry Savage, Sr. & Louis Karl Kittlaus named in apendingFINRA complaint (Case #

    2012033508702) alleging that misleading sales literature was distributed related to GWG Debenture and that unsuitable recommendations were made.

  • 5/22/2014- Letter of Acceptance Waiver and Consent from Michael John Wurdlinger, (Case #2012034936001) who worked for Center State Securities until April 30, 2013. To resolve allegations that Wurdlinger failed to adequately supervise sales of illiquid , high risk GWG Debentures, he agreed to a six month suspension from serving in a principal capacity and to requalify by examination for  principal capacity.
  • 6/19/2014- Letter of Acceptance Waiver and Consent from Anil Vazirani  (Case #2012034936002) who worked for Center State Securities until 11/05/2012. To resolve allegations that he sold $500,000 of GWG Debentures to seven customers without being registered with FINRA as required, he agreed to a 30 day suspension and a fine of $5,000.
  • 6/27/2014- Letter of Acceptance Waiver and Consent from 79 Capital Securities, LLC and Michael M. Ward (Case#2013035565002). To resolve allegations that 79 Capital Securities and Ward prepared an internet posting regarding the Debentures that omitted material information, allowed an unregistered employee sell securities  and that they failed to record required customer information related to sales of the Debentures they agreed to a $25,000 fine, a censure of 79 Capital Securities and Ward was suspended in all principal capacities for 20 days.
  • 8/12/2014- Letter of Acceptance Waiver and Consent from Jason Price Lamb, Chief Compliance Officer at Center Street Securities, Inc. (Case#2012034936003). To resolve allegations that Lamb failed to supervise certain sales of the Debentures by Center Street representatives, including sales to elderly customers and retirees, whose investment objectives were inconsistent with the speculative nature of the Debentures, Lamb agreed to a suspension in all principal capacities for two months and a fine of $10,000.
  • 8/12/2014-Letter of Acceptance Waiver and Consent from Center Street Securities, Inc. (Case #2012034936004). To resolve allegations that Center Street had inadequate supervisory procedures and permitted representatives to make unsuitable recommendations to purchase the Debentures to customers with stated conservative investment objectives and need for safety of principal, and distributed inaccurate sales literature regarding the Debentures, Center Street agreed to a censure, and undertaking to revise procedures and a fine of $100,000.
  • 8/12/2014-Letter of Acceptance Waiver and Consent from Robert Fontaine a broker with Freedom Investors Corporation (Case# 2013035565401). To resolve allegations that Fontaine made unsuitable recommendations and sale of GWG Debentures to customers he agreed to a one month suspension and a fine of $10,000.
  • 8/25/2014-David Joseph Escarcega named in FINRA Disciplinary Proceeding #2012034936005 alleging that Escarcega made unsuitable recommendations, falsely told customers that the Debentures were safe, low-risk liquid, or guaranteed and that he distributed a misleading sales brochure regarding the Debentures. Escarcega is currently registered with Center Street Securities.
  • 11/14/2014-Letter of Acceptance Waiver and Consent from Arque Capital, Ltd. (Case# 2012033994701). To resolve allegations that Arque Capital distributed misleading information   GWG Debenture sales material Arque agreed to a censure and a $50,000 fine.
  • 11/25/2014-Jeffrey D. Noard named in FINRA Disciplinary Proceeding #2012034936101 alleging that Noard made an unsuitable recommendation and sale of GWG Debentures to an elderly widow, with few financial assets, significant liquidity needs, and a “moderately conservative” risk tolerance who was  seeking income to fund her retirement. Noard was previously registered with Allied Beacon Partners, a firm that was expelled by FINRA in December 2013. He is currently registered with Cabot Lodge Securities.

GWG Renewable Secured Debentures

GWG Holdings purchases life insurance policies on the secondary market at a discount and begins paying the policy premiums until the death of the insured, at which time it collects the insurance benefit. The business model anticipates collecting more upon the maturity of the policy than was paid to purchase it and pay the premiums.

In 2012, GWG began selling the Renewable Secured Debentures with a minimum investment of $25,000 and with varying terms of 6 months to 7 years and interest rates ranging from 4.75% to 9.5%.

An investment in the Debentures is illiquid, involves a high degree of risk, including the risk of loss of the entire investment and not suitable for those investors who have limited liquid net worth or who need liquidity prior to the Debenture’s maturity date.

Rex Securities Law , located in Boca Raton, FL, provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney. Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Rex Securities Law

561 391 1900

Options for Investors Who Purchased GWG Debentures from Center State Securities

Investors who purchased GWG Renewable Secured Debentures from Center State Securities should be aware of two recent FINRA sanctions:

  • In July 2014 Center Street Securities was fined $100,000 by FINRA for selling GWG Debentures to persons for whom the investment was not suitable. See this blog posting for more information. 
  • In August 2014 Center Street Securities Chief Compliance Officer Jason Lamb was suspended for two months and fined $10,000 for approving sales of GWG Debentures to persons for whom the investments were unsuitable and for failing to heed other red flags in connection with the GWG Debenture sales. See this prior posting. 

If you suffered damages on GWG Debentures purchased from Center Street Securities , contact us to learn about you remedies.

Rex Securities Law , located in Boca Raton, FL, provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney. Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Rex Securities Law

561 391 1900

Center Street Securities Broker Jason Lamb Sanctioned Over Sale of GWG Debentures

Nashville, TN-8/12/2014

Jason Price Lamb of Nashville, TN, was recently sanctioned by the Financial Industry Regulatory Authority (FINRA) for in connection with the sale of GWG Renewable Secured Debentures.  In the Letter of Acceptance Waiver and Consent , FINRA found that Lamb served as Chief Compliance Officer (CCO) at Center Street Securities and that he failed to adequately supervise certain sales of GWG Renewable Secured Debentures, an illiquid high-risk alternative investment.

Center Street has 4 independent registered representatives operating from 67 branch offices nationwide. As CCO, Lamb was responsible for the firm’s compliance functions. FINRA found that Lamb failed to recognize transactions that contained red flags, including:

  • Lamb approved purchases of GWG Debentures with conservative investment objectives
  • Lamb approved Debenture purchases that resulted in a high concentration of a customer’s total investable assets, which exceeded the firm’s internal guidelines in some instances
  • Lamb approved a Debenture sale where the application misrepresented the liquidity of the Debenture

Lamb was suspended from association with any FINRA member in a principal capacity for two months and fined $10,000.  In July 2014, Center Street Securities was fined $100,000 for making sales of the GWG Debentures to persons for whom the investment was not suitable and for allowing excessive concentration levels.

GWG Renewable Secured Debentures– These investments are described in the prospectus as being illiquid, speculative and involving a high degree of risk, including the risk of losing the entire investment. There is no trading market for the GWG Debentures and investors cannot access their principal prior to maturity , absent death, bankruptcy, or total disability.

Rex Securities Law , located in Boca Raton, FL, provides representation to  investors  in Tennessee and nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney. Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Rex Securities Law

561 391 1900

FINRA Files Complaint vs. Center Street Broker David Escarcega Over GWG Debentures

On August 25, 2014, the Financial Industry Regulatory Authority (FINRA) filed an enforcement action against Center Street Securities broker David Joseph Escarcega in connection with the sale of more than $1.8 million of GWG Renewable Secured Debentures.

In the complaint, FINRA alleges:

  • GWG Debentures are an illiquid and high risk alternative investment
  • Escarcega made false and misleading oral and written statements to 7 customers in connection with their purchase of the Debentures
  • Escarcega made unsuitable recommendations to purchase the Debentures to 12 customers
  • Escarcega’s recommendation to purchase the speculative and risky Debentures were inconsistent with his elderly and retired customers’ investment objectives

If you purchased GWG Debentures from Center Street Securities or any other broker dealer you may be able to recover damages. Call to speak with an experienced securities attorney.

Rex Securities Law provides nationwide representation to investors seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.  Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Rex Securities Law

561 391 1900

Center Street Securities Sanctioned Over Sale of GWG Renewable Secured Debentures

In connection with the sale of GWG Renewable Secured Debentures, in July 2014, FINRA censured Center State Securities, imposed a fine of $100,000 and required an undertaking that Center Street Securities conduct a comprehensive review of the adequacy of it policies and procedures related to reviewing and approving alternative investments as well as responding to regulatory requests.

In the enforcement action FINRA alleged that  the sale of GWG Renewable Secured Debentures  were unsuitable for the persons to whom the firm sold them because they were high risk and the purchases constituted excessive concentration levels of the customer’s total investable assets. FINRA also alleged that during 2012, Center Street distributed an inaccurate GWG sales brochure and that some customer account forms contained inaccurate information about the customer’s net worth.

If you suffered damages as a result of purchasing GWG Renewable Secured Debentures from Center Street Securities, you may be able to recover damages through FINRA arbitration. Call for a no cost evaluation of your case.

Rex Securities Law provides nationwide representation to investors seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.  Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Rex Securities Law

561 391 1900