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.
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