California investment advisor accused of best interest violations
The Certified Financial Board has suspended Western International Securities financial advisor Patrick Michael Egan from using his CFP designation. The decision comes after the US Securities and the Exchange Commission (SEC) charged him, the broker-dealer, and four other Western International brokers with alleged Regulation Best Interest (Reg BI) violations related to their sale of GWG Holdings L Bonds.
The SEC contends they sold investors these risky, illiquid junk bonds despite the fact these investments were not in the latter’s best interests, given their investing profiles, financial goals, and risk tolerance levels. The CFP Board is the non-profit organization that administers the Certified Financial Planner Certification program.
Our GWG L Bond lawyers are looking into claims of losses by customers of Western International Securities broker Patrick Egan. He also is a registered investment advisor with Coordinated Wealth Management in Glendora, CA, and that is how some of his clients may know him. If you suffered L Bond or any other losses while working with Egan, call Shepherd Smith Edwards and Kantas in California at (619) 550-4847. Throughout the United States, call (866) 901-3775.
L bonds investors have lost millions of dollars
GWG Holdings sold $1.6B of L bonds to investors with the help of over 140 regional broker-dealers. In February 2022, GWG defaulted on $13.6M of payments and interest it owed L Bond investors. The alternative asset firm filed for Chapter 11 bankruptcy protection in April 2022. But the company was having financial problems even before then. Visit GWG Holdings Inc. and GWG Holdings L Bonds for more information.
According to the SEC’s Reg BI civil lawsuit against Western International Securities and its financial advisors, Egan and the other brokers allegedly didn’t conduct the proper due diligence to determine the actual risks involved in GWG L Bonds, and they themselves may have purportedly not fully comprehended the impact of GWG changing its business model in 2018.
L Bonds stopped being directly collateralized by life insurance bonds, and instead, proceeds from their sales were allegedly used to invest in GWG Ex-Chairman Brad Heppner’s The Beneficient Company Group, LP. Many investors are saying that they didn’t know about this change.
Commission accuses Egan of ignoring the risks involved in GWG L bonds
The SEC’s complaint accuses Egan of acknowledging he should have looked over Beneficient’s financial statements instead of assuming it was a profitable company. He also allegedly ignored the disclosure on the 2020 GWG L bond prospectus describing these private placements as high-risk.
One example the regulator points to is when Egan allegedly recommended GWG L bonds to an older retiree who was an inexperienced investor with a moderate to conservative risk tolerance level. This customer ended up investing what was the equivalent of 8% of his liquid and total net worth in L bonds. The SEC contends that based on the facts, recommending these high-yield bonds to this customer was not in his best interests.
Experienced L bond lawyers
According to Patrick Egan’s CRD, he has worked in the industry for twenty-four years. Brokerage firms that sold L bonds, including Western International Securities, and their financial advisors have come under scrutiny over the high commissions that they earned from these sales. Our GWG L bond lawyers are representing many of the investors who have suffered losses.
GWG Holdings losses: How do you recover your losses in GWG L bonds?
Contact us at SSEK Law Firm today.