A FINRA arbitration claim (similar to a lawsuit) has been filed under the process made available by the Financial Industry Regulatory Authority (FINRA) for such cases. The claim filed by a couple in Ozark, Missouri who is in their nineties and eighties is against Center Street Securities and names one of their brokers, Joseph LaTour, who is based in Springfield, and operates as an investment advisor in the name of Latour Asset Management.
The claimants have alleged unsuitable recommendations of the GWG L Bonds of GWG Holdings made by LaTour despite their specification of seeking stable and low-risk investments. They have claimed damages of 500. There were some other unsuitable recommendations also made by the broker-dealer. These included non-traded BDCs (business development companies) and privately traded REITs (Real Estate Investment Trusts).
Joseph LaTour has been in the industry for thirteen years and was associated with Brookstone Capital and Management, and Mutual of Omaha Investor Services prior to the present association with Center Street.
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 representing 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 attorney at 1-888-614-9356 for a private consultation.
GWG Holdings and L Bonds
Table of Contents
GWG Holdings filed for Chapter 11 bankruptcy in 2022 April. NASDAQ announced the delisting of the GWG common stock in May 2022.
At the time of their bankruptcy filing, they had sold L Bonds aggregating to$1.6 billion and defaulted on the $13.6 million owed to investors in interest and principal repayments. They were also under investigation by the Securities Exchange Commission (SEC) for delays in regulatory filings.
Center Street is one of over 140 brokers that partnered with Emerson Equity, the leader, to sell L Bonds of GWG Holdings. The lucrative 8% sales commissions, to be split between Emerson and the selling partner, appears to be the driver behind many of the unscrupulous sales made.
In light of GWG Holding’s bankruptcy, Haselkorn & Thibaut, P.A. is attempting to speak with investors who lost money. Currently, our law firm is defending investors who have brought lawsuits against brokerages including Center Street. Investors in GWG L Bonds are invited to get in touch with our knowledgeable investment fraud attorney at 1-888-614-9356 for a private consultation and free GWG Holdings Investor Loss Recovery Guide.
The Investor GWG Lawsuit (FINRA) Claim
The contention of this couple is that they were never informed of the spectacular risk attendant in the GWG L Bond investment by either LaTour or Center Street. The Ponzi-like plan of repayments, using money from fresh infusion to pay off older investors, was also not revealed to them, nor was the speculative and illiquid nature of the investment.
For a senior couple with a manifest low level of risk tolerance and conservative goals and expectations, this should never have been a recommendation. Despite this background, Center Street and LaTour went ahead and concentrated their investments in illiquid alternate investments, one of them being L Bonds, likely driven by the high commission earnings it brought them.
Center Street has been accused of ‘inexcusable’ supervision in their failure to supervise LaTour who was essentially operating in a self-supervision mode. Also alleged was the lack of evidence of any meaningful supervisory communication while doing business.
No supervisory procedures seem to have been put in place by the firm, a requirement to rein in unscrupulous representatives. Negligence, omissions, misrepresentations, failure to supervise, and unsuitability have been alleged by the couple.
Examples of unsuitable investment fraud
Unsuitable investment fraud occurs every day, often by stockbrokers working for powerful brokerages. The financial damage a bad investment can cause is unlimited and most victims do not even realize that they are being taken advantage of. However, the legal system protects investors from fraud by setting up certain standards to ensure they are receiving the best advice possible. If you think you have been a victim of such fraud, you should contact an experienced securities fraud attorney today.
The suitability of an investment depends on the investor’s personal situation, age, and financial circumstances. A broker cannot make assumptions about an investor’s future without taking the time to assess the information he has about the investor. A broker should use this information to make a recommendation that’s appropriate for the investor’s current financial situation and risk tolerance. A broker who fails to analyze this information may be committing investment fraud or negligence.
FINRA rules on unsuitable investment fraud
While brokers are not fiduciaries, they are still held to the same standards of professionalism as other individuals. Under FINRA rules, they must only recommend investment options that are suitable for the investor, and not necessarily the ones that will earn the highest returns. Brokers who recommend unsuitable investments are also held liable for investor losses. As a result, a large number of FINRA arbitration claims involve unsuitable investments.
Suitability issues are a major claim in securities fraud cases. Suitability concerns which investments are recommended for a customer, including the investor’s age, financial situation, and investment experience. FINRA rules on suitability impose three key obligations on brokers. First, they must have a reasonable basis to believe the customer’s investment objectives, financial situation, and investment experience are compatible with the recommended investments. Second, brokers must conduct a thorough assessment of the investor’s investment profile.
Experience GWG L Bond Lawyers
The GWG L Bond lawyers of Haselkorn & Thibaut are representing investors in their FINRA arbitration claims. We are seeing many other investors who are present or past customers and have claims against Center Street Securities and/or Joseph LaTour.
Targeting older customers appears to be a deliberate strategy allegedly adopted by Center Street. There are many other cases that have been filed against broker-dealers for the recovery of GWG L Bonds. If you have dealt with Center Street or LaTour and would like to have a discussion on whether you have grounds for a claim, you can schedule a free case evaluation by calling 1-888-614-9356..