In recent court filings, Emerson Equity LLC has disclosed that it has paid over $2.1 million in attorney fees and arbitration costs through January 1, 2024, to defend itself from more than 60 customer complaints related to its sale of GWG L Bonds. In addition, according to public disclosure reports for its brokers, Emerson Equity LLC has paid over $4.2 million in settlements in 2023 and the first few days of 2024.
The customer complaints are primarily FINRA securities arbitration complaints that were brought by GWG L Bond investors who were sold speculative, high-risk, illiquid, high-commission, and unrated GWG L Bonds by the firm’s brokers, including Tony Barouti. More than half of Emerson Equity’s GWG L Bond-related customer disputes arise out of recommendations made by Mr. Barouti.
Although Emerson Equity’s legal fees and settlements have surpassed $6 million, the cost represents less than one-third of the $20.1 million that the firm received from GWG Holdings Inc. for brokerage services from June 2018 through June 2022.