FINRA Arbitration Awards $100,000 to Investor Over Unsuitable GWG L Bonds

Posted on June 5th, 2024 at 10:57 AM
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.

Tags: eccleston, eccleston law, finra

Return to Archive

TESTIMONIALS

Previous
Next

As a financial advisor with over 20 years of experience, I feel fortunate to call Jim my attorney and friend. He is a fantastic lawyer and trusted advisor. He is skilled in the matters necessary to do the job well. He uses his thoughtful approach and calm demeanor to achieve a positive outcome for the client. If you want to feel confident that nothing will be missed and that you will be represented in a highly professional manner, call Jim Eccleston.

Bill C. and Dan M.

LATEST NEWS AND ARTICLES

March 13, 2025
Congress Considers Expanding the Accredited Investor Definition

A recent congressional hearing examined potential reforms to the accredited investor definition, a critical threshold determining who can participate in private market investments.

March 12, 2025
GPB Capital Investors May Receive Some Compensation Under Proposed Distribution Plan

GPB Capital Holdings investors have not received returns on their investments since 2018. According to InvestmentNews, after years of litigation, a court-appointed receiver has submitted a plan to return funds to the 17,000 investors who purchased $1.8 billion in GPB limited partnerships.

March 11, 2025
Former CNBC Analyst Pleads Guilty to $2.7 Million Securities Fraud Scheme

James Arthur McDonald Jr., a former financial advisor and frequent CNBC guest analyst, has agreed to plead guilty to securities fraud, admitting to defrauding investors out of at least $2.7 million, as reported by ThinkAdvisor. The felony charge carries a maximum sentence of 20 years in federal prison.