A FINRA (Financial Industry Regulatory Authority) claim for arbitration seeking up to $1 million in compensation has been filed by investors. The claim pertains to the losses incurred in the GWG L Bonds. Financial advisor Greg Richards, Benchmark Investments, and Centaurus Financial are the named respondents.
GWG Holdings filed for bankruptcy earlier this year and defaulted on it payments to bondholders. The company failed to file its annual report in a timely manner due to a reverse merger transaction with BEN, has numerous accounting issues pertaining to balance sheet items, and delays in completing the fair valuation of life insurance policies.
In light of GWG Holding’s bankruptcy, Haselkorn & Thibaut, P.A. is attempting to speak with investors who lost money by purchasing GWG L Bonds. Currently, our firm is defending investors who have brought lawsuits against brokerages. Investors in GWG L Bonds and GWG Preferred Stock are invited to get in touch with our knowledgeable investment fraud lawyers at 1-888-614-9356 for a private consultation.
Profile of Gregory John Richards
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Richards has worked for over 21 years in the industry, with firms like First American National Securities, USAllianz Securities, and Questar Capital, among others.
Richards was a registered representative of Centaurus from May 2011 through February 2020. He currently operates in Scottsdale, AZ, as Liberty Wealth Management and is registered with Benchmark Investments as a broker.
Two disputes from 2008 show up in the list of his prior customer disputes. In one of the cases, the customer claimed unsuitability. The case was settled for $23K.
In another case, it is believed that the customer’s ability to recollect the securities sold with her permission may have been impaired on account of memory issues. After the intervention of expert investment attorneys, the case was settled for $11K.
Impacted investor stories
Impacted investors include two children, a widow, and a friend of Richards who were all sold these speculative, risky, illiquid junk bonds by claiming that GWG was a financially sound company and that investments in L Bonds were safe. They were all found suitable for the product by Richards despite being in different stages and conditions of life. All of them suffered losses in the investment.
Making investment recommendations that are in line with an investor’s level of risk tolerance and investment goals is a responsibility enjoined by financial advisors. Their failure in this respect can open them to claims for recovery of losses.
Investors have different tales of misery. One invested his entire life savings in the L Bonds. Another investor claims to be highly concentrated in them based upon the advisor’s recommendation.
Also inexcusable is the lack of supervision on part of the broker-dealers. Richards gives the impression of having operated in a self-supervised manner. After all, it is unlikely that a watchful supervisor would have approved these trades for many of the eventually impacted investors.
Negligence is one of the charges leveled against Gregory Richards of Liberty Wealth Management, Benchmark Investments, and Centaurus.
Investing in GWG L Bonds may be a risky proposition. While the company admitted to filing inaccurate financial reports with the SEC, a recent article revealed that the company has been unable to fulfill obligations to investors. This includes misleading investors about the risks of investing in GWG L Bonds. In addition, the company has filed for bankruptcy. However, investors should not be alarmed. Below are some things you should know about GWG L Bonds.
In April 2022, GWG Holdings Inc. filed for bankruptcy protection under Chapter 11. Trouble for the alternative asset firm had been building up. It had accumulated $200 million in debt by 2020. Outstanding L Bonds amounted to $1.6 billion, apart from other obligations. It had employed a network of 140 broker-dealers to ensure success in the sale of the life-settlement-backed bonds and rewarded them through handsome commissions.
L Bonds are not tradable on stock exchanges. Most advisors agree that these bonds are not suitable for retail investors, and they are not recommended for long-term holding.
The SEC has opened an investigation into GWG Holdings’ $2 billion L Bond. GWCH has missed several important SEC filing deadlines, including for its financial statements for the first three quarters of 2020. This investigation was first conducted by the SEC’s Division of Enforcement, which also issued subpoenas related to other issues involving the company’s accounting practices.
In October 2020, the Enforcement Division of the SEC served GWGH with a subpoena for documents related to accounting matters and the issuance of GWG’s bonds. In addition, the SEC issued document requests and subpoenas to broker-dealer firms related to GWG’s bond sales practices. The 145 broker-dealer firms involved in the investigation failed to properly train their representatives about the risks of L Bonds and approved transactions without carefully considering whether they were appropriate for their customers.
The SEC has also ordered GWG Holdings to file a supplemental annual report for the year ending December 31, 2020. Investors were misled into believing that the L bonds were low-risk investments and could be a good investment when the fact is that GWG’s financial condition has worsened since those reports were filed. The company has admitted to filing false reports with the SEC.
GWG misrepresented the risks associated with its L Bonds
Emerson Equity may have misled investors by failing to disclose the risks associated with GWG Holdings’ L Bonds. The firm allegedly failed to adequately warn investors that the securities posed significant financial risks, and recommended them to conservative investors only when they should not have. In addition, investors who purchased the bonds were unaware of the potential downsides. Whether the company is liable is a separate matter.
A securities fraud investigation has found that GWG failed to disclose the risks of its L Bonds to investors. As a result, many investors are at risk of losing a large portion of their principal. The firm is pursuing monetary damages to victims of the company’s misrepresentation. Although GWG admitted to filing inaccurate reports with the SEC, it failed to disclose that it used investor capital to pay out high distributions to other investors.
Matthew Thibaut, Esq., a founding partner of Haselkorn & Thibaut (InvestmentFraudLawyers.com), a nationwide law firm that is representing numerous clients in pending claims and investigating these potential claims on behalf of numerous other investors, commented: “Based on the calls we’ve been getting recently, it appears that some financial advisors who were marketing GWG-related investments (and GWG L-Bonds in particular) to client investors that were seeking safe, conservative, investments” and those clients had little or no appreciation for the level of risk they were really incurring with these investments.
A recovery claim of this nature is best pursued with the help of securities attorneys and seasoned investment lawyers by your side.
Investment attorneys at Haselkorn & Thibaut, with several decades of experience between them, have been fighting for the recovery of investor money and have successfully recovered millions of dollars from brokerage firms. Our GWG L Bond investment attorneys can be reached at 1-888-614-9356.