Financial Firms

UBS Financial Ordered to Pay Punitive Damages in $1.3M Arbitration Ruling Over YES Strategy

Published on: July 28, 2022 | by Shepherd Smith Edwards & Kantas, LLP

Broker-Dealer Losses Yet Another Investor Claim Involving Its Yield Enhancement Strategy

A Financial Industry Regulatory Authority arbitration panel has awarded investors $1.34M, including punitive damages, for losses sustained in the UBS Yield Enhancement Strategy. This is the latest award related to UBS Financial’s complex options trading strategy that has cost investors over $1B.

In June 2022, UBS agreed to pay $25M to settle Securities and Exchange Commission (SEC) fraud charges accusing the firm with failure to provide its brokers with proper training and oversight in the YES program even as they sold this strategy to hundreds of investors. This purportedly caused many of the firm’s financial advisors to not fully comprehend the risks involved and affected their ability to determine whether the Yield Enhancement Strategy was, in fact, in the best interests of these customers.

UBS To Pay $25M To Settle SEC Charges Involving Its Yield Enhancement Strategy

Published on: July 26, 2022 | by Shepherd Smith Edwards & Kantas, LLP

Firm Accused of Inadequate Training And Poor Supervision of Brokers That Sold YES

UBS Financial Services has consented to pay about $25M to settle US Securities and Exchange Commission (SEC) charges related to the firm’s Yield Enhancement Strategy (YES). The regulator contends that the broker-dealer, which marketed and sold $2B of UBS YES to about 600 high-net-worth individual investors between February 2016 and February 2017, allegedly failed to adequately train its financial advisors in and supervise this complex iron condor strategy.

This purportedly included the firm knowing about— documenting—the “possibility of significant risk” but not notifying many of its brokers and clients about this.

Former Customers of Newbridge Securities Broker Betsy Whipple Pursue 7-Figure GWG L Bond Claim.

Published on: July 20, 2022 | by Shepherd Smith Edwards & Kantas, LLP

Hiko, Nevada Financial Advisor, BL Whipple Wealth Management, LLC

Three investors have filed a Financial Industry Regulatory Authority (FINRA) arbitration claim against Newbridge Securities. The claimants seek up to $1M in damages over losses they sustained in GWG L Bonds.

These risky, illiquid junk bonds are from GWG Holdings, Inc., which filed for Chapter 11 bankruptcy protection in April 2022. Newbridge Securities is among the more than 140 regional brokerage firms that earned high commissions from selling L Bonds to customers.

SSEK Law Firm Is Investigating Cabot Lodge Securities Over GWG L Bond Sales

Published on: July 15, 2022 | by Shepherd Smith Edwards & Kantas, LLP

Investors Accuse New York-Based Broker-Dealer of Reg BI Violations

Securities lawyers at Shepherd Smith Edwards and Kantas (SSEK Law firm) are looking into claims of losses by investors who were sold GWG Holdings L Bonds by their Cabot Lodge Securities brokers. Cabot Lodge is one of the more than 140 regional brokerage firms that sold high-risk product failures and junk bonds to customers and naive investors. More than a dozen clients were accusing the NY-based brokerage firm of alleged Regulation Best Interest violations when it sold L Bonds to retirees.

GWG Holdings Inc., sold $1.6B of L Bonds, defaulted on $13.6M of payments and interest it owed investors in February 2022. In April 2022, the alternative asset firm filed for Chapter 11 Bankruptcy protection.

Emerson Equity Wholesalers That Pitched GWG L Bonds Leave The Firm

Published on: July 14, 2022 | by Shepherd Smith Edwards & Kantas, LLP

Leading Broker-Dealer Pitched Regional Broker-Dealers To Sell These Risky Junk Bonds

Securities lawyers at SSEK are investigating Emerson Equity wholesalers that pitched risky junk bonds. According to InvestmentNews, a review of BrokerCheck data suggest several Emerson Equity wholesalers across the US have left the firm since the beginning of 2022. They are the same wholesalers responsible for pitching GWG L Bonds to regional broker-dealers.

Emerson, the managing brokerage firm in selling these risky, life settlement-backed bonds for GWG Holdings, Inc., has partnered with over 140 regional brokerage firms to market and sell L Bonds to investors, including retail customers and retirees.

Trinidad & Tobago Investor Files Northstar Financial Services (Bermuda) Claim Against Truist Investment Services

Published on: July 4, 2022 | by Shepherd Smith Edwards & Kantas, LLP

Claimant Alleges Unsuitable Offshore Investment Led to Significant Losses

An investor who lives in Trinidad and Tobago has filed an arbitration claim against Truist Investment Services over losses he sustained in Northstar Financial Services (Bermuda). The claimant seeks up to six figures in damages. His broker allegedly advised him to invest in this risky, offshore-like annuity product. These recommendations happened despite the claimant stating he was seeking safety and security for his family’s assets.

Our Northstar (Bermuda) investment attorneys represent this investor in FINRA arbitration against Truist Investment Services. Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyers.com) represents many other claimants against Truist, a SunTrust Investment Services, Inc. broker-dealer subsidiary.

NAV Advisors’ Marc Korsch in Sarasota, Florida Allegedly Sold GWG L Bonds to Customers

Published on: July 3, 2022 | by Shepherd Smith Edwards & Kantas, LLP

Customers of Barred Centaurus Financial Broker Are Requesting Over $7.4M in Damages

Marc Frederick Korsch, the CEO of NAV Advisors in Sarasota and a former Centaurus Financial registered representative, is reportedly involved in a GWG Holdings L Bond case. A Centaurus Financial investor filed this case. Although not a respondent in the Financial Industry Regulatory Authority (FINRA) arbitration claim, Korsch allegedly unsuitably recommended this risky life settlement-backed bond to the customer.

GWG Holdings, Inc. filed for Chapter 11 bankruptcy protection in April 2022. It sold $1.6B of L Bonds to investors through more than 140 regional brokerage firms and financial advisors. These firms earned high commissions from the transactions. Visit GWG Holdings, Inc. and GWG Holdings L Bonds for more information.

SEC Accuses Western International Securities & Five Brokers Of Reg BI Violations Involving $13.3M in L Bond Sales

Published on: July 2, 2022 | by Shepherd Smith Edwards & Kantas, LLP

SEC Alleges Western International Securities and Its California Financial Advisors Committed Due Diligence Failures

The US Securities and Exchange Commission (SEC) has filed civil charges against Western International Securities and several of its registered representatives. The firm and its advisors allegedly violated Regulation Best Interest standards when they sold about $13.3M of GWG L Bonds to investors between July 2020 and April 2021.

The regulator contends that the broker-dealer neglected 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 owes L Bond investors. The Dallas-based alternative asset firm filed for bankruptcy protection in April 2022.

Goldman Sachs Under Investigation by SEC Over ESG Funds

Published on: July 1, 2022 | by Shepherd Smith Edwards & Kantas, LLP

Did The Firm Misrepresent Environmental, Social, and Governance Qualifications in Marketing Materials?

According to The Wall Street Journal, sources say that The US Securities and Exchange Commission (SEC) is investigating Goldman Sachs Group Inc. The investigation includes certain funds that utilize environmental, social, and governance (ESG) criteria. ESG investing considers these three factors when assessing an investment’s overall impact and financial returns.

Goldman Sachs’s mutual fund business oversees at least four funds with ESG or clean energy in their names. The SEC is reportedly examining these investments in terms of their environmental, social, and governance criteria and metrics that marketing materials tout them to have.

Mexican Investors Allege That Infinex Investments Overconcentrated Their Assets In Northstar Financial Services (Bermuda)

Published on: June 30, 2022 | by Shepherd Smith Edwards & Kantas, LLP

Infinex Broker Roberto Leslie Accused of Unsuitably Recommending Offshore Entity

Two investors from Mexico City who worked with Infinex financial advisor Roberto Francisco Leslie have filed a Financial Industry Regulatory Authority (FINRA) arbitration claim against Infinex Investments. Related to their investment losses in Northstar Financial Services (Bermuda). Alleging unsuitability, concentration, and other broker misconduct, they seek up to $500K for their losses.

Our Northstar Financial Services (Bermuda) investment attorneys at Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyers.com) represent these claimants in FINRA arbitration against Infinex. The hearing will take place in Houston, Texas.