Center Street Securities is Named in this Six-Figure FINRA Arbitration Case
An older couple who live in Cleveland, Tennessee has filed a Financial Industry Regulatory Authority (FINRA) arbitration claim seeking up to $500K in damages from Center Street Securities. This comes after its registered representative Morgan Darby Hill allegedly unsuitably recommended that they invest in GWG Holdings L Bonds.
Morgan Hill is currently registered as a broker with both Center Street Securities and Arete Wealth Management in Knoxville. He is also a registered investment advisor with Center Street Advisors. However, locally Hill markets himself as the CEO of the wealth preservation and distribution firm, Hill & Hill Financial, LLC.
In April 2022, GWG Holdings Inc., which sold $1.6B of L Bonds to customers, filed for Chapter 11 bankruptcy protection. Considering that these risky, speculative junk bonds were sold by around 145 regional brokerage firms to investors all over the United States for high commissions, this has left many retail customers, including retirees, scrambling to recoup their losses.
Our GWG L Bond attorneys at Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyers.com) represent these claimants in FINRA arbitration against Center Street Securities. Their case will be heard by arbitrators in Nashville. Find out more about GWG Holdings, Inc. and its L Bonds.
Older Couple Wanted Conservative Investments. Center Street Allegedly Recommended Risky, Illiquid Products
These inexperienced investors attended a retirement planning course run by Hill at Chattanooga State University a few years ago. During a meeting with him, the claimants were clear that they wanted the retirement funds that they were entrusting Center Street Securities placed in moderate, stable, or low-risk investments. He purportedly promised to honor their wishes.
Instead, this Center Street Securities broker allegedly recommended that these older investors invest in L Bonds while failing to warn them about the incredible risks involved. This includes the Ponzi-like nature of repayments that came exclusively from bonds sold to newer investors. Morgan Hill also allegedly recommended other non-traded alternative investments that were unsuitable for the couple.
Now, the claimants are accusing Center Street Securities of making unsuitable investment recommendations and inappropriately concentrating their assets in illiquid, privately traded securities. Meanwhile, the firm’s broker allegedly misrepresented the companies he was marketing to them as conservative and in line with the couple’s investment objectives.
Hill has worked for 13 years as a registered representative. Other firms where he used to work include Brookstone Capital Management, 1st Discount Brokerage, Inc., and USA Financial Securities Corp.
Failure to Supervise, Misrepresentations, and Omissions
Center Street Securities’ supervision of the claimants’ account and of Hill was simply inexcusable. There was allegedly no meaningful communication by any supervisor, or any compliance until it was too late. Instead, Morgan Hill purportedly appears to have been self-supervised.
In their FINRA arbitration case, this older couple is also alleging misrepresentations and omissions, gross negligence, failure to supervise, and other claims
Seasoned GWG Holdings L Bond Attorneys
SSEK Law Firm is representing a number of GWG L Bonds investors against Center Street Securities and other broker-dealers. If you suffered losses in L Bonds or if GWG Holdings owes you money, contact our securities lawyers today so that we can help you explore your legal options. Contact us online or call us at (800) 259-9010.