Investing can be a rollercoaster – especially when things go south. Many folks who put their hard-earned cash into LifeMark And GWG Capital are now allegedly facing steep losses. They’re scratching their heads, wondering what went wrong and how to get their money back.
Here’s the scoop: The Securities and Exchange Commission (SEC) has charged LifeMark Securities Corp. for breaking rules about L Bonds from GWG Holdings. This mess has left investors in a tight spot.
Haselkorn & Thibaut are currently representing GWG investors and investigating LifeMark Securities. Investors are encouraged to call for a free private consultation on recovery options.
But don’t worry – we’ve got your back. We’ll break down what happened, what it means for you, and what steps you can take next. Ready to take control of your financial future?
Key Takeaways
Table of Contents
- The SEC charged LifeMark Securities for breaking rules about GWG Holdings’ L Bonds, leading to investor losses.
- LifeMark and its rep Geoffrey Wolterstorff failed to properly check key info about L Bonds before recommending them to clients.
- Investors claim they lost money due to unsuitable recommendations, with one retiree losing up to $100,000.
- Brokers earned high commissions (up to 8%) for selling L Bonds, which may have led to misrepresenting the risks.
- Affected investors can seek help from securities law firms and file FINRA arbitration claims to try to recover their losses.
Overview of LifeMark Securities and GWG Capital
LifeMark Securities and GWG Capital have been in hot water lately. The SEC charged them with breaking Reg BI rules, and customers claim they lost money on bad investments.
Securities and Exchange Commission (SEC) charges over Reg BI violations
The Securities and Exchange Commission slapped LifeMark Securities with charges for violating Regulation Best Interest. This rule requires broker-dealers to act in their clients’ best interests when recommending investments.
LifeMark and its representative, Geoffrey Wolterstorff, allegedly failed to properly evaluate key disclosures about L Bonds before recommending them to customers.
According to the complaint, Wolterstorff suggested a $50,000 L Bond to a 63-year-old client with low risk tolerance – a clear mismatch. As a result, he faced stiff penalties: $28,421 in disgorgement, a $15,000 fine, and a six-month suspension from the industry.
The SEC also filed a complaint against another broker, Garrett Moretz, for falsely claiming L Bonds were “guaranteed” and 100% safe. These cases highlight the SEC’s crackdown on unsuitable investment recommendations and misrepresentations in the financial services sector.
Customers’ allegations of investment losses
Investors have raised serious concerns about LifeMark Securities’ practices. A retired individual, seeking low-risk options, claims to have lost up to $100,000 due to unsuitable recommendations.
This investor, described as unsophisticated, alleges LifeMark assured them about the safety of GWG L Bonds without disclosing critical risks like illiquidity.
These allegations have led to legal action. A FINRA arbitration claim (no. 24-00853) has been filed against LifeMark Securities. KlaymanToskes, a securities law firm, is now investigating LifeMark for potentially violating SEC rules and breaching fiduciary duties.
They’re examining if LifeMark failed to conduct proper due diligence or misrepresented the nature of these investments to clients with moderate risk tolerance.
Potential Violations and Misconduct
The financial industry has strict rules to protect investors. Some firms may break these rules, leading to serious consequences.
Misrepresentations and unsuitable investment recommendations
LifeMark Securities and other broker-dealers misled investors about GWG L Bonds’ risks. They painted these high-yield bonds as low-risk investments, despite their illiquid nature and speculative status.
This deception led many to make unsuitable choices for their financial goals and risk tolerance.
Brokers had a strong incentive to push these risky products. They pocketed commissions up to 8% for each L Bond sale. This conflict of interest likely contributed to the widespread misrepresentation of these securities’ true nature.
As a result, many investors found themselves holding unsuitable investments that didn’t align with their preservation of capital objectives.
Insufficient due diligence and omissions of material facts
LifeMark and Wolterstorff fell short in their duty to investors. They didn’t check key info in prospectuses and Form 10-K filings. This oversight hid GWG’s history of net losses and cash flow problems.
Investors weren’t told about the risks of GWG L Bonds, like their illiquid nature and lack of listing.
Misrepresentation plagued the sales process. LifeMark allegedly pitched GWG L Bonds as safe investments with guaranteed interest. The reality? GWG bondholders will likely recover only a small fraction of their money.
This case echoes other corporate scandals, showing what happens when firms skip proper research.
Steps to Take if You Suffered Investment Losses
If you’ve lost money on investments, don’t panic—help is available. Reach out to a securities law expert for guidance and explore your options for recovering damages through FINRA arbitration.
Contacting a securities law firm for assistance
If you’ve suffered investment losses, reaching out to a securities law firm can be a smart move. These specialists have the expertise to navigate complex financial disputes. KlaymanToskes, for instance, has a track record of recovering over $250 million for clients through FINRA arbitrations.
Our experienced investment fraud lawyers offer free initial consultations to assess your case. We have over 50 years of experience and a 98% success rate.
Securities lawyers can help you understand your rights and potential routes for recovery. They’re well-versed in federal securities laws and can guide you through processes like filing a FINRA arbitration claim.
Filing a FINRA arbitration claim
After consulting with a securities law firm, you might decide to file a FINRA arbitration claim. This process starts by submitting a Statement of Claim, Submission Agreement, and filing fees to FINRA.
The Statement of Claim outlines your case against the broker or firm, detailing alleged misconduct and losses. Once filed, respondents have 45 days to answer the claim.
Next, both parties select arbitrators from lists provided by FINRA. They review Arbitrator Disclosure Reports to ensure impartiality. Hearings can be held in person, via video conference, or by phone.
This method often proves faster and less expensive than traditional litigation, making it a popular choice for resolving securities disputes.
Conclusion
Investors affected by the LifeMark and GWG Capital situation face difficult decisions. Knowing your rights and options is essential for recovering losses. Consulting a securities law expert can significantly impact your case.
Filing a FINRA claim may offer the best chance for recovery. Many others are also working to secure their financial futures in this situation.
FAQs
1. What happened with GWG Holdings, Inc. and LifeMark?
GWG Holdings, Inc. filed for Chapter 11 bankruptcy. This affected LifeMark, as they had a business relationship. The Securities and Exchange Commission (SEC) issued a cease-and-desist order and imposed a civil money penalty.
2. How does this situation impact investors?
Investors face potential losses from illiquid investments. They may seek help through securities arbitration or litigation. The Financial Industry Regulatory Authority can assist in resolving disputes between investors and financial advisors.
3. What legal options do affected investors have?
Investors can file claims for breach of fiduciary duty against their investment advisers. They may pursue action under SEC Rule 10b-5 or the Securities Exchange Act of 1934. Securities litigation is an option for seeking compensation.
4. Are banks and insurance companies involved in this issue?
Yes, banks and insurance companies may have vicarious liability. They often offer fixed income investments and trusts. These institutions must follow regulations set by nationally recognized statistical rating organizations.
5. How can investors protect themselves in the future?
Investors should understand their financial advisor’s fiduciary duty. They need to research thoroughly before making stock market investments. It’s crucial to stay informed about interest rates and market trends. The Securities Act provides important protections for investors.
