Garden City, New York financial advisor (CRD# 5225102) has received multiple investor complaints alleging that his investment recommendations led to...Read More
SEC Charges Against Western International Securities: GWG L Bonds
The US Securities and Exchange Commission has filed charges against Western International Securities and five of the firm’s brokers: Nancy Cole, Patrick Egan, Andy Gitipityapon, Steven Graham, and Thomas Swan. According to a complaint released by the regulator, the firm and these representatives engaged in violations of the SEC’s Regulation Best Interest “when they recommended and sold an unrated, high-risk debt security known as L Bonds to retirees and other retail investors.” As a press release by the SEC alleges, the firm sold “an aggregate of $13.3 million” in these products between July 2020 and April 2021.
Regulation Best Interest requires that broker-dealers act in the best interest of their customers. The SEC alleges that L bonds issued by GWG “were high risk, illiquid, and only suitable for customers with substantial financial resources.” In spite of this, the firm and the named brokers allegedly sold the products to retail customers with moderate risk tolerances and who had fixed incomes. The SEC alleges that Western International Securities and the five brokers “did not exercise reasonable diligence, care, and skill” in evaluating the investments, recommending them “to at least seven particular customers” for whom they had no reasonable basis to believe the bonds were suitable. These actions constituted failures to comply with the “Care Obligation” under Regulation Best Interest, the SEC states, alleging further that the firm failed to create and enforce adequate supervisory procedures to ensure its compliance with the regulation.
In a statement about the charges, the SEC’s Director of the SEC’s Division of Enforcement said: “Reg BI is clear: broker-dealers must act in the best interest of their customers… When they fail to do so, as we allege happened here, they put retail investors at risk and we’ll hold them accountable.”
More information about the SEC’s charges against Western International Securities, Nancy Cole, Patrick Egan, Andy Gitipityapon, Steven Graham, and Thomas Swan is available via its press release and the complaint itself. (Information current as of August 10, 2022.)
Carlson Law represents several investors involved in GWG L bond claims against financial advisors and investment firms throughout the United States. If you or a loved one have suffered losses investing in GWG L bonds, please call us at 888-976-6111 or complete our contact form for a free and confidential consultation.