The seriousness of allegations against financial advisors cannot be understated. Recently, a case involving Heath Goldstein of WESTERN INTERNATIONAL SECURITIES, INC. (CRD 39262) has drawn significant attention. The case revolves around a dispute raised by a former client, alleging out-of-pocket loss from the GWG L Bond Investment amounting to $74,000. The complaint was filed on August 28, 2023, and is currently pending (FINRA CRD number 2147679).
Understanding the Allegation
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The client, who was reportedly well suitable for the investment, claimed to have suffered financial loss due to GWG ceasing its interest payment in January 2022 and filing for chapter 11 bankruptcy in April 2022. The client’s attorney has requested $52,000 as a settlement to avoid an arbitration lawsuit. Goldstein, on the other hand, maintains that the client had attended a seminar workshop sponsored by GWG, was presented with the necessary sales material and prospectus to review, and ultimately made the decision to purchase after reviewing all the material. He asserts that the client is attempting to use him and the broker/dealer as an insurance policy against his investment loss.
The FINRA Rule and Its Simplified Explanation
FINRA, the Financial Industry Regulatory Authority, is a non-governmental organization that regulates member brokerage firms and exchange markets. The organization has a set of rules designed to protect investors and ensure market integrity. In this case, the relevant FINRA rule is the one that governs the conduct of brokers and dealers. This rule requires them to observe high standards of commercial honor and just and equitable principles of trade. In simpler terms, this means that brokers and dealers are expected to act honestly, fairly, and in the best interests of their clients.
Why This Matters to Investors
Such allegations and their subsequent legal proceedings can significantly affect investors’ trust in their financial advisors and the investment industry as a whole. They serve as a reminder that investments carry risks, and investors must be fully informed and understand these risks before making investment decisions.
Moreover, these allegations underscore the importance of regulatory bodies like FINRA and their role in maintaining market integrity and protecting investors. They also highlight the need for investors to be vigilant and proactive in monitoring their investments and the actions of their financial advisors.
Red Flags and Recovery of Losses
Investors should be aware of certain red flags that may indicate financial advisor malpractice. These include frequent and unexplained trades, high-pressure sales tactics, and recommendations that don’t align with the investor’s financial goals or risk tolerance. If investors suspect malpractice, they can take legal action to recover their losses.
FINRA Arbitration is one such avenue. It is a dispute resolution process that can be quicker and less expensive than litigation. The national investment fraud law firm Haselkorn & Thibaut, with offices in Florida, New York, North Carolina, Arizona, and Texas, specializes in helping investors recover losses through FINRA Arbitration. With over 50 years of experience and an impressive 98% success rate, they offer free consultations and operate on a “No Recovery, No Fee” policy. Their toll-free consultation number is 1-800-856-3352.
Currently, Haselkorn & Thibaut is investigating the allegations against Heath Goldstein and WESTERN INTERNATIONAL SECURITIES, INC. Investors who have suffered losses due to the actions of their financial advisors are encouraged to reach out for a free consultation.
