Articles Tagged with Ponzi Scheme

Iorio Altamirano LLP, a securities arbitration law firm based in New York, NY, is investigating potential lawsuits and securities arbitration claims against Great Point Capital LLC for its sale of L Bonds issued by GWG Holdings, Inc. (GWGH).  Upon information and belief, Great Point Capital LLC was a part of a network of broker-dealers who sold the speculative, high-risk, and illiquid GWG L Bonds.

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.

Many GWG L Bond investors are skeptical that they will receive any significant portion of their principal back. Investment News has reported that one anonymous GWG L bond investor estimates that the GWG L Bonds may now be worth 20 to 30 cents on the dollar.

Iorio Altamirano LLP, a nationally recognized securities arbitration law firm, helps an elderly woman recover her irreplaceable savings invested in GWG L Bonds.

NEW YORK, NY — Iorio Altamirano LLP announces that it has helped a 75-year-old retiree recover the entire amount that she invested in GWG L Bonds that her broker-dealer recommended. The law firm filed a FINRA arbitration claim against the broker-dealer in early March 2022, alleging that the speculative, high-risk, and illiquid GWG L Bonds were unsuitable for the elderly woman, who had no prior investment experience and was living on a fixed income. The claim also alleged that the broker-dealer made material misrepresentations and omissions about the features and risks of the GWG L Bonds and GWG Holdings, Inc., the company that issued the L Bonds. GWG Holdings, Inc. is now in Chapter 11 bankruptcy.

Iorio Altamirano LLP (gwglawyer.com) also represents numerous other investors who have filed individual arbitration claims against the brokerage firm that sold them GWG L Bonds. Collectively, the claims seek to recover over $2.5 million in losses and damages.

Iorio Altamirano LLP, a securities arbitration law firm based in New York, NY, is investigating potential lawsuits and securities arbitration claims against Aegis Capital Corp. for its sale of L Bonds issued by GWG Holdings, Inc. (GWGH).  Upon information and belief, Aegis Capital Corp. was a part of Emerson Equity LLC’s network of broker-dealers who sold the speculative, high-risk, and illiquid GWG L Bonds.  Iorio Altamirano LLP has spoken to several retail investors who purchased GWG L Bonds through the recommendation of brokers registered with Aegis Capital Corp.

On April 20, 2022, GWG Holdings, Inc. filed for Chapter 11 bankruptcy, allowing GWG Holdings to propose a reorganization plan.  On May 17, 2022, the Nasdaq Stock Market announced that it would delist the common stock of GWG Holdings, Inc.

Many GWG L Bond investors, who have not received interest or maturity payments since January 2022, are skeptical that they will see a return of their invested capital. Investment News has reported that one anonymous GWG L bond investor estimates that the GWG L Bonds may now be worth 20 to 30 cents on the dollar.

After filing Chapter 11 bankruptcy last month and failing to file its annual report with the Securities and Exchange Commission earlier this year, GWG Holdings, Inc. will now be delisted from Nasdaq.   On May 17, 2022, the Nasdaq Stock Market announced that it would delist the common stock of GWG Holdings, Inc.  Since April 29, 2022, the stock has been suspended and has not been traded.

New York securities arbitration law firm Iorio Altamirano LLP is investigating potential legal claims related to investments in L Bonds offered by GWG Holdings, Inc. (GWGH). To read about the investigation’s findings, including a crucial event timeline, please visit our website:  www.gwglawyer.com.

GWG Holdings, Inc.’s bankruptcy filing revealed for the first time that the ongoing SEC investigation includes an examination of sales practices of the GWG L Bonds by the brokerage firms that sold the securities, including Emerson Equity and its network of regional broker-dealers.  According to the bankruptcy filing,  the United States Securities and Exchange Commission issued subpoenas and documents to individual brokerage firms selling GWG L Bonds.  As of the bankruptcy filing, GWG  Holdings, Inc.’ had over $1.62 billion in outstanding GWG L Bond obligations, mostly owed to retail investors.

**Update:  June 16, 2022** On June 15, 2022,  the United States Securities and Exchange Commission filed a lawsuit against Western International Securities, Inc., and several of its brokers, in California Central District Court in connection with approximately $13.3 million in L bonds sold to retail customers.  The firm is accused of failing to perform due diligence regarding the inherent risks associated with L Bonds. The brokers included in the suit are Steven Graham, Andy Gitipityapon, Thomas Swan, Nancy Cole, and Patrick Egan. 

The complaint alleges that although the prospectus for the June 2020 offering stated that L Bonds were only suitable for customers with “substantial financial resources,” Western International did not set any criteria or thresholds for its customers to invest in L Bonds. Western International Securities also did not restrict the sale of L Bonds to customers with certain risk profiles or investment objectives.

The complaint also alleges that the named brokers misunderstood important issues regarding GWG Holdings, Inc. and the GWG L Bonds, including that GWG significantly changed its business model beginning in 2018 and that GWG L Bonds were not directly collateralized by life insurance policies. As a result, the brokers recommended GWG L Bonds to retail customers without a reasonable basis to believe that the investments were in the customers’ best interest.

After months of working with legal and financial advisors to try and restructure outside of court, on April 20, 2022, GWG Holdings, Inc. filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Southern District of Texas. The bankruptcy filing is a significant and troublesome development for GWG L Bond investors who invested substantial portions of their life savings into GWG L Bonds. According to GWG’s latest filing with the SEC, GWG has more than $1.6 billion in aggregate principal outstanding to GWG L Bond investors. A Chapter 11 bankruptcy will allow GWG Holdings to propose a reorganization plan.

Investment News has reported that one anonymous GWG L bond investor estimates that the GWG L Bonds may now be worth 20 to 30 cents on the dollar.  Despite the unwelcomed news, GWG L bond investors are not without recourse. Many retail investors, including those represented by securities arbitration law firm Iorio Altamirano LLP, are filing securities arbitration claims against brokerage firms that sold these speculative, high-risk, and illiquid financial products.  These actions are separate and in addition to the bankruptcy proceedings.

GWG Holdings’ bankruptcy filing revealed for the first time that the ongoing investigation by the United States States Securities and Exchange Commission (SEC) includes an examination of sales practices of the GWG L Bonds by the Selling Group, including  Emerson Equity LLC and its network of regional broker-dealers.  According to the recent bankruptcy filing, the SEC issued subpoenas and document requests to individual brokerage firms beginning in late-2021.

The Financial Industry Regulatory Authority (“FINRA”) has sanctioned Geneos Wealth Management, Inc. (“Geneos Wealth Management”) for failing to reasonably supervise brokers’ recommendations of the LJM Preservation & Growth Fund.  Geneos Wealth Management was also sanctioned for negligently omitting to tell investors in an offering related to GPB Capital Holdings, LLC that the issuer failed to timely make required filings with the SEC, including audited financial statements.  On March 18, 2022, FINRA and Geneos Wealth Management entered into a Letter of Acceptance, Waiver, and Consent (“AWC”) whereby Geneos Wealth Management accepted the following sanctions:

  • a censure;
  • a $150,000 fine;

David Gentile, the disgraced founder and former CEO of GPB Capital Holdings LLC, has sued GPB Capital. Mr. Gentile seeks to make GPB Capital, which an independent court-appointed monitor is now overseeing, cover the legal costs for his defense against criminal and civil securities fraud.

In February 2021, Mr. Gentile was criminally charged with securities fraud, wire fraud, and conspiracy in federal court. The criminal complaint alleged that Mr. Gentile, among others, engaged in a scheme to defraud investors by misrepresenting the source of funds used to make monthly distributions to investors and the amount of revenue generated by two of GPB’s investment funds, GPB Holdings, LP, and GPB Automotive Portfolio, LP.

Separately, the SEC has charged Mr. Gentile, GPB Capital, and related entities with running a Ponzi-like scheme that raised roughly $1.8 billion from securities issued by GPB Capital. The SEC believes that as many as 17,000 retail investors nationwide have been defrauded.

Over the past calendar year, GPB Capital investors have won over $2.4 million in monetary awards in 10 out of 11 (nearly 91%) arbitration claims that have proceeded to a final hearing.  According to public records, many other claims filed against broker-dealers who sold the private placements offered by GPB Capital have been settled for monetary compensation.

The judgments and awards come after years of filing lawsuits and arbitration claims by GPB Capital investors.

For our latest posts related to GPB Capital, please click here.

Between July 2013 and June 2018, limited partners invested $675 million into GPB Automotive Portfolio, LP, which was sold as a private placement offering by broker-dealers and registered investment advisory firms across the country. Financial advisors, who received large commissions for selling limited partnership units of GPB Automotive, lured investors into this high-risk and illiquid security by emphasizing a high rate of return and monthly distributions.  Unfortunately for investors, distributions have not been paid since December 2018.

With the recent announcement that GPB Automotive Portfolio, LP agreed to sell Prime Automotive for $880 million, limited partners have been wondering what that means for them.

Below, we delve into GPB Automotive LP’s latest quarterly filing with the SEC to look for answers.

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