Firm Investigations

Heath Goldstein and Western International Securities: Iorio Altamirano LLP Investigating the Sale of GWG L Bonds – Clark Summit, PA

Published on: April 6, 2023 | by Iorio Altamirano

Iorio Altamirano LLP, a securities arbitration law firm based in New York, NY, is investigating potential securities arbitration claims against Western International Securities, Inc. and its Pennsylvania-based broker, Heath Goldstein, for its sale of L Bonds issued by GWG Holdings, Inc. Western International Securities was part of a network of broker-dealers who sold the speculative, high-risk, and illiquid GWG L Bonds to retail investors.

GWG Holdings, Inc., which stopped making interest and maturity payments to GWG L Bond investors in January 2022, filed for Chapter 11 bankruptcy in April 2022.

According to court filings, in the four years before the bankruptcy filing, Western International Securities received at least $3 million in commissions from GWG Holdings for selling L Bonds to retail investors, and the firm sold approximately $13.3 million in L Bonds to retail investors between June 2020 and January 2022.

Roshan Perera: SEC Charges Former Aegis Capital Broker with Fraud – Long Island, NY

Published on: March 27, 2023 | by Iorio Altamirano

The Securities and Exchange Commission has charged former Aegis Capital Corp. broker Surage Kamal Roshan Perera and his firm, Janues Capital Incorporated, with fraud and obtaining emergency relief in court, including a temporary restraining order and an asset freeze. The SEC alleges that from February 2022 until March 2023, the Bellrose, NY broker defrauded at least one investor out of millions of dollars by lying about investment opportunities and strategies concerning training losses and using funds received from others to give the victim the promised returns in a Ponzi-like scheme. According to his public disclosure report, Mr. Perera was registered as an investment broker with Aegis Capital Corp until September 12, 2022.

In a separate action, the U.S. Attorney’s Office for the Eastern District of New York filed criminal charges against Mr. Perera. He was arrested on Monday, March 27, 2023, and arraigned on a 16-count indictment charging him with securities fraud, investment advisor fraud, wire fraud, and money laundering, in connection with a scheme to induce an investor to purchase stock in companies that traded on the NASDAQ and New York Stock Exchange (NYSE).

Customers of Mr. Perera or Aegis Capital Corp. who have suffered financial losses as a result of Mr. Perera’s negligence or misconduct can contact New York securities arbitration law firm Iorio Altamirano LLP for a free and confidential consultation and review of their legal rights.

GWG Bankruptcy Update (March 14, 2023): GWG Appears to be Headed Toward Liquidation

Published on: March 14, 2023 | by Iorio Altamirano

**Update – April 22, 2023:** On April 21, 2023, the Bankruptcy Court approved GWG’s further revised Disclosure Statement for its Second Amended Reorganization Plan. The Plan will now be sent to creditors, including L Bondholders, to accept or reject the Plan. For more information, please visit our most recent blog post: What L Bondholders Need to Know About GWG Holdings, Inc.’s Chapter 11 Plan.

**Update – April 13, 2023:** On April 13, 2023, GWG submitted a revised Disclosure Statement for its Second Amended Reorganization Plan that provides creditors with more information about potential recoveries. However, the amount bondholders will recover under the proposed restructuring plan remains extremely uncertain and will likely take multiple years to bear fruit. To read more, check out our latest blog post: GWG Bankruptcy Update (April 17, 2023): Liquidation Options Become Clearer as Recovery for Bondholders Remain Uncertain

As GWG Holdings, Inc. continues to navigate the bankruptcy process, Iorio Altamirano LLP urges L bondholders to contact the firm to evaluate their other legal options to recover their investment losses. Iorio Altamirano LLP represents GWG L Bondholders throughout the country in FINRA arbitration claims against the brokerage firms and financial advisors that recommended and sold the L Bonds to retail investors.

GWG Bankruptcy Update (February 11, 2023): GWG Proposes Liquidation in its Amended Reorganization Plan

Published on: February 11, 2023 | by Iorio Altamirano

**Update: March 14, 2023** In court filings on March 11, 2023, GWG notified the Bankruptcy Court that it would submit a Second Amended Reorganization Plan, which proposes the liquidation of GWG through the establishment of two liquidation trusts. Read more at our latest blog post: GWG Bankruptcy Update (March 14, 2023): GWG Appears to be Headed Toward Liquidation

Original Post:

GWG Bankruptcy Update (February 11, 2023): GWG Proposes Liquidation in its Amended Reorganization Plan

Broker-Dealers Sold GWG L Bonds Using Aggressive and Misleading Marketing

Published on: February 1, 2023 | by Iorio Altamirano

In a court filing made on December 15, 2022, in the Chapter 11 bankruptcy court, the Official Committee of Bondholders of GWG Holdings Inc. (“Bondholder Committee”) alleged that broker-dealers sold GWG L Bonds using aggressive and misleading marketing even after it became clear that GWG’s business was failing and that the only way to repay bondholders was to continue to sell more L Bonds to existing and additional retail investors. The Bondholder Committee, which represents the interests of GWG L Bondholders in the Chapter 11 bankruptcy proceeding, alleged that “GWG was a class Ponzi Scheme.”

However, much of the court filing, including specific allegations of wrongdoing, was filed under seal.

On February 1, 2023, the United States Bankruptcy Court for the Southern District of Texas unsealed several significant court filings, including a draft adversary legal complaint against certain current and/or former directors and officers of GWG Holdings, Inc., individuals, and corporate entities affiliated with or controlled by Brad Heppner, transferees of certain fraudulent transfers, and key broker-dealers who marketed and sold L Bonds.

“GWG Was a Classic Ponzi Scheme” – Official Committee of Bondholders of GWG Holdings, Inc.

Published on: December 28, 2022 | by Iorio Altamirano

**Update: February 1, 2023** On February 1, 2023, the United States Bankruptcy Court for the Southern District of Texas unsealed several significant court filings, including a draft legal complaint. The complaint was filed by the Official Committee of Bondholders of GWG Holdings Inc. (“Bondholder Committee”) against certain current and/or former directors and officers of GWG Holdings, Inc., individuals, and corporate entities affiliated with or controlled by Brad Heppner, transferees of certain fraudulent transfers, and key broker-dealers who marketed and sold L Bonds. The Bondholder Committee represents the interests of GWG L Bondholders in the Chapter 11 bankruptcy proceeding.

The unsealed complaint has revealed the following allegations, which were made after the bondholder committees reviewed documents and information that are currently not in the public domain:

Together with other insiders, Brad Heppner was the mastermind behind a Ponzi scheme whereby GWG, in conjunction with its broker-dealer network, sold hundreds of millions worth of L Bonds to retail investors even when it became clear that the only way to repay those investors was to sell yet more L Bonds to more retail investors.

GWG Bankruptcy Update: Questions Remain as to When, or If, GWG L Bond Investors Will Receive Future Distributions

Published on: October 27, 2022 | by Iorio Altamirano

For the latest on Iorio Altamirano LLP’s investigation of GWG L Bonds, please see our most recent blog posts:

Broker-Dealers Sold GWG L Bonds Using Aggressive and Misleading Marketing

“GWG Was a Classic Ponzi Scheme” – Official Committee of Bondholders of GWG Holdings, Inc.

Western International Securities Denies Violating Regulation Best Interest in Recommending and Selling Risky and Illiquid GWG L Bonds to Retail Investors

Published on: September 15, 2022 | by Iorio Altamirano

On September 14, 2022, Western International Securities, Inc. filed its Answer to the Securities and Exchange Commission’s Complaint denying that the firm violated the standards under Regulation Best Interest (“Reg BI”) in approving, recommending, and supervising the sale of speculative, high-risk, and illiquid L Bonds issued by GWG Holdings, Inc.

The case, which is being litigated in the United States District Court of the Central District of California, is being closely watched by investors and the securities industry alike because it is the first substantive enforcement action brought by the SEC against a broker-dealer since Reg BI went into effect on June 30, 2020.

FINRA Sanctions Joseph Stone Capital for Excessive Trading in Customer Accounts

Published on: September 8, 2022 | by Iorio Altamirano

On September 8, 2022, FINRA announced that it had ordered Joseph Stone Capital L.L.C. (“Joseph Stone”) to pay restitution of approximately $825,000 to customers whose accounts were excessively traded by the firm’s representatives.

In related settlements, FINRA suspended eight current or former Joseph Stone representatives and required them to pay, collectively, an additional $211,000 in restitution to impacted customers. Additionally, FINRA suspended three Joseph Stone supervisors for failing to reasonably identify or respond to red flags of excessive trading and barred two representatives for refusing to respond to FINRA’s requests for information in connection with the investigation.

If you suspect your account was excessively traded at Joseph Stone Capital L.L.C., contact New York securities arbitration lawyers Iorio Altamirano LLP for a free and confidential evaluation of your account.

Newbridge Securities Corporation’s Customers Who Purchased GWG L Bonds Are Worried About Their Invested Capital

Published on: July 25, 2022 | by Iorio Altamirano

GWG L Bondholders who purchased the speculative, high-risk, illiquid, and unrated bonds through Newbridge Securities Corporation are worried after last week’s approval by the bankruptcy judge to allow GWG Holdings Inc. to enter into a new debtor-in-possession (“DIP”) financing package. The new DIP financing package includes an option for GWG Holding Inc. to sell its portfolio of life insurance policies for at least $610 million, approximately $1 billion less than GWG Holding Inc’s outstanding obligations to GWG L Bondholders.

Even though the portfolio of life insurance policies does not directly secure the GWG L Bonds, this development is significant for GWG L Bond investors because GWG Holdings Inc.’s largest tangible asset is its portfolio of life insurance policies. It is believed that the value of these tangible assets will significantly impact the outcome of GWG Holdings Inc.’s restructuring effort through its filing for Chapter 11 bankruptcy.

Upon information and belief, Newbridge Securities was a part of a network of broker-dealers who sold the risky GWG L Bonds. GWG Holdings, Inc., which stopped making interest and maturity payments to GWG L Bond investors in January 2022, filed for bankruptcy protection earlier this year, on April 20, 2022.