In a recent development, Craig McDaniel, a broker with Capital Investment Group, Inc. (CRD 14752) in South Carolina, has been named in a customer dispute alleging misconduct related to the sale of GWG Holdings, Inc. securities. The complaint, which was settled on February 9, 2024, comes in the wake of GWG Holdings, Inc.‘s Chapter 11 bankruptcy filing on April 20, 2022.
According to the disclosure, no Statement of Claim was filed by the client or opposing counsel, leaving the specific allegations and requested damages undisclosed. The product type involved in the dispute is listed as Direct Investment-DPP & LP Interests, suggesting that the investment in question may have been a high-risk alternative investment.
Craig McDaniel, who holds the CRD number 1087979, has been registered with Capital Investment Group, Inc. as a broker since January 22, 2004, and is currently licensed in the state of South Carolina. The firm, based in Raleigh, North Carolina, has been a FINRA member since 1984.
Understanding the GWG Holdings, Inc. Bankruptcy and FINRA Rules
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GWG Holdings, Inc., a financial services firm that purchased life insurance policies on the secondary market, filed for Chapter 11 bankruptcy protection on April 20, 2022. The company’s bankruptcy has left many investors uncertain about the future of their investments and the potential for recovery.
FINRA, the Financial Industry Regulatory Authority, maintains rules and regulations to protect investors and ensure fair practices within the securities industry. One such rule, FINRA Rule 2111, known as the “Suitability Rule,” requires brokers to have a reasonable basis to believe that a recommended transaction or investment strategy is suitable for the customer, based on the customer’s investment profile.
When recommending alternative investments, such as DPP (Direct Participation Program) or LP (Limited Partnership) interests, brokers must conduct thorough due diligence and disclose all material risks to investors. Failure to do so may constitute a violation of FINRA rules and expose brokers and their firms to potential liability.
Investment fraud and bad advice from financial advisors can have devastating consequences for investors. According to a Forbes article, investment fraud costs Americans billions of dollars each year, with many victims being elderly or inexperienced investors.
The Importance of Investor Awareness and Protection
The case involving Craig McDaniel and Capital Investment Group, Inc. highlights the importance of investor awareness and protection when it comes to complex, high-risk investments. Investors must be fully informed of the potential risks and drawbacks associated with alternative investments, such as DPP and LP interests, before making investment decisions.
Investors who have suffered losses due to broker misconduct or unsuitable investment recommendations may have legal recourse to recover their losses. Haselkorn & Thibaut, a national investment fraud law firm with offices in Florida, New York, North Carolina, Arizona, and Texas, is currently investigating the case involving Craig McDaniel and Capital Investment Group, Inc.
With over 50 years of combined experience and a 98% success rate, Haselkorn & Thibaut has a proven track record of helping investors recover losses through FINRA arbitration. The firm operates on a contingency basis, meaning clients pay no fees unless a recovery is obtained.
Red Flags and Seeking Legal Assistance
Investors should be aware of potential red flags that may indicate broker misconduct or unsuitable investment recommendations, such as:
- Lack of transparency regarding investment risks and potential drawbacks
- Pressure to invest in high-risk or complex products without adequate explanation
- Failure to consider an investor’s individual financial situation, goals, and risk tolerance
- Concentration of an investor’s portfolio in a single, high-risk investment
If you suspect that you have been the victim of investment fraud or unsuitable investment recommendations, it is crucial to seek legal assistance from experienced professionals. Haselkorn & Thibaut offers free, confidential consultations to help investors understand their legal options and potential for financial recovery.
To discuss your case with a knowledgeable investment fraud attorney, contact Haselkorn & Thibaut at their toll-free number, 1-888-994-8066, or visit their website to learn more about their services and track record of success in FINRA arbitration cases.
