INVESTORS: Western International Securities broker Thomas Brian Swan was charged by the SEC for violating Regulation Best Interest in connection with recommendations to purchase GWG-L bonds.
Thomas Brian Swan (CRD: 1698430) is registered as a broker and investment adviser with Western International Securities, where he’s been employed since 2008. Swan was previously registered as a broker with Financial West Group from 2003 until 2008.
Swan has five disclosures on his BrokerCheck report. One customer dispute filed against Swan was denied.
August 2022 Customer Dispute
Damage Amount Requested: $158,000.00
June 2022 Civil Judgment
Initiated By: United States Securities and Exchange Commission
Allegations: Plaintiff Securities and Exchange Commission alleges that this matter concerns violations by Western and five of its registered representatives of the Best Interest Obligation under Rule 15l-1(a) of the Securities Exchange Act of 1934 (“Regulation Best Interest” or “Reg BI”) in connection with their recommendations to retail customers to purchase an unrated debt security known as an L Bond. L Bonds were corporate bonds offered by GWG Holdings, Inc. (“GWG”). L Bonds were high risk, illiquid, and only suitable for customers with substantial financial resources. The L Bonds relevant to this Complaint paid fixed interest rates of between 5.50% and 8.50%, depending on the maturity period of the bond. GWG offered maturity periods of two, three, five, or seven years. Between July of 2020 and April of 2021, registered representatives of Western recommended and sold approximately $13.3 million in L Bonds to retail customers. Western and its registered representatives Nancy Cole, Patrick Egan, Andy Gitipityapon, Steven Graham, and Thomas Swan (together, the “Registered Representative Defendants”) failed to exercise reasonable diligence, care, and skill to understand the risks, rewards, and costs associated with L Bonds. At the time they recommended L Bonds to retail customers, the Registered Representative Defendants did not understand key risks associated with L Bonds and GWG. Defendants also recommended L Bonds to at least seven retail customers without a reasonable basis to believe L Bonds were in those customers’ best interests. Among other things, these customers had moderate-conservative or moderate risk tolerances, investment objectives that did not include speculation, limited investment experience, limited liquid net worth, and/or they were retired. The Registered Representative Defendants nevertheless recommended L Bonds to these seven customers without reasonable bases for doing so. Western’s written policies and procedures merely recited the objectives of Reg BI, without offering registered representatives specific guidance tailored to Western’s operations. Western also had inadequate procedures for enforcing what limited policies it had regarding compliance with the Care Obligation of Reg BI. As a result of the conduct described in this Complaint, Swan violated Rule 15l-1(a)(1) of the Exchange Act.
August 2020 Customer Dispute
Allegations: Negligent misrepresentation
Damage Amount Requested: $1,300,000.00
Settlement Amount: $110,000.00
August 2005 Regulatory Judgment
Initiated By: California Department of Insurance
Allegations: CA Insurance Dept. alleged breach of fiduciary responsibility even though Sun America denied claim.
Sanction Details: Settlement offer from CDOI – restricted insurance license until completion of the settlement of $20,000 to client by January 2, 2007. Upon completion of the conditions of the settlement, I am authorized to request removal of the license restriction.
Broker Comment: Sun America denied claim and no further action taken. Settlement was with CA Dept. of Insurance. I did not admit to any wongdoing in this case and I fully intend to comply with the conditions of this settlement.
The Sonn Law Group is currently investigating allegations surrounding Thomas Brian Swan. We represent investors in claims against negligent brokers and brokerage firms. If you or your loved one experienced investment losses, we are here to help. For a free consultation, please call us now at 866-827-3202 or complete our contact form.