FINRA Arbitration Awards $100,000 to Investor Over Unsuitable GWG L Bonds
From the desk of Jim Eccleston at Eccleston Law
In a recent FINRA arbitration, an investor was awarded close to $100,000 due to unsuitable investments in GWG L bonds purchased in 2018 and 2020.
According to InvestmentNews, the arbitrator emphasized the broker-dealer and financial advisor's failure to uphold their fiduciary duty to the client. Mahrle pointed to GWG's weak economic position in 2020 as a red flag that Greenberg Financial Group and advisor David Sherwood ignored.
The FINRA award is unique because it is “reasoned” and reflects a growing trend of arbitration awards being reasoned decisions in securities industry disputes.
InvestmentNews reports that expert testimony supported the unsuitability of GWG L bonds, leading the arbitrator to hold Greenberg Financial and Sherwood liable for the investor's damages. While punitive damages were denied due to lack of factual basis, the award underscores the importance of broker-dealers and advisors fulfilling their fiduciary obligations to clients.
Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.
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