INVESTORS: The SEC charged Western International Securities and several of its registered representatives with allegedly violating Regulation Best Interest standards when they sold $13.3M of GWG L Bonds.
The SEC announced charges against Western International Securities and several of its registered representatives with allegedly violating Regulation Best Interest standards when they sold $13.3M of GWG L Bonds to investors between July 2020 and April 2021. The SEC alleges that Western International failed to conduct adequate due diligence when recommending and selling these unrated and speculative junk bonds. In February 2022, GWG Holdings, Inc. defaulted on $13.6M of payments and interest it owed to investors. The Dallas-based alternative asset firm filed for bankruptcy protection in April 2022.
Wealth International Securities is one of over 140 brokerage firms that sold L Bonds to customers and, in turn, received high commissions. Despite stating that the L-bonds were only suitable for investors with substantial financial resources, brokers allegedly recommended the bonds to customers with fixed incomes and moderate risk tolerance levels. According to the SEC, the brokers sold L Bonds to customers that resulted in between $5,400 and $32,500 in aggregate commissions each.
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