Burton Bartlett, a broker associated with Landolt Securities, Inc. (CRD 28352), is facing allegations of unsuitable investment recommendations related to the sale of GWG Holdings Inc. L bonds. The customer complaint, which was recently settled, comes nearly two years after GWG Holdings Inc. filed for Chapter 11 bankruptcy protection.
Customer Alleges Unsuitable L Bond Purchase in December 2021
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According to the complaint, the customer alleges that their purchase of GWG L bonds in December 2021, based on the recommendation of Burton Bartlett, was unsuitable given their financial situation and investment objectives. The customer is seeking damages in connection with the losses incurred due to the alleged unsuitable investment advice.
GWG Holdings Inc. Files for Chapter 11 Bankruptcy Protection
In April 2022, GWG Holdings Inc., a financial services firm that sold life insurance bond products, filed for Chapter 11 bankruptcy protection. The company’s decision to seek bankruptcy protection has had significant implications for investors who purchased their L bonds, as the value and liquidity of these investments have been severely impacted. Bloomberg reported on the bankruptcy filing, highlighting the mounting accounting issues faced by the company.
Understanding FINRA Rules on Suitability
FINRA Rule 2111 requires brokers and financial advisors to have a reasonable basis to believe that an investment recommendation is suitable for their client based on the client’s financial situation, risk tolerance, and investment objectives. This rule is designed to protect investors from being placed in investments that are not aligned with their needs and goals.
Suitability Factors to Consider
When determining the suitability of an investment, brokers must take into account various factors, including the client’s age, investment experience, financial situation, and risk tolerance. Additionally, brokers must conduct due diligence on the investment products they recommend to ensure that they understand the risks and features associated with those products.
The Importance of Suitability for Investor Protection
The suitability rule is a critical component of investor protection in the financial industry. By requiring brokers to recommend investments that are appropriate for their clients, the rule helps to prevent investors from being exposed to unnecessary or excessive risks that could jeopardize their financial well-being. Investment fraud and bad advice from financial advisors can have devastating consequences for investors, making the enforcement of suitability rules all the more important.
Consequences of Unsuitable Investment Recommendations
When brokers fail to adhere to the suitability rule and recommend investments that are not appropriate for their clients, investors can suffer significant financial losses. In such cases, investors may have the right to seek compensation for their losses through FINRA arbitration or other legal means.
Red Flags for Financial Advisor Malpractice
Investors should be aware of potential red flags that may indicate financial advisor malpractice, such as:
- Recommending investments that are inconsistent with the client’s risk tolerance or investment objectives
- Failing to disclose material risks associated with an investment product
- Engaging in excessive or unauthorized trading in a client’s account
- Misrepresenting the features or performance of an investment product
Seeking Legal Guidance and Representation
If you suspect that you have been the victim of unsuitable investment recommendations or other forms of financial advisor malpractice, it is essential to seek legal guidance and representation from experienced investment fraud attorneys. Haselkorn & Thibaut, a national investment fraud law firm with offices in Florida, New York, North Carolina, Arizona, and Texas, is currently investigating the allegations against Burton Bartlett and Landolt Securities, Inc.
Recovering Investment Losses Through FINRA Arbitration
Investors who have suffered losses due to unsuitable investment recommendations may be able to recover their losses through FINRA arbitration. Haselkorn & Thibaut has over 50 years of combined experience representing investors in FINRA arbitration proceedings and has a successful track record of recovering losses for their clients, with an impressive 98% success rate.
The firm offers free consultations to investors who believe they may have been the victim of investment fraud or unsuitable investment recommendations. With their “No Recovery, No Fee” policy, investors can pursue their claims without upfront costs. To discuss your case with an experienced investment fraud attorney, call Haselkorn & Thibaut‘s toll-free number at 1-888-885-7162 .
