Former Clarity Capital Partners’ Kyle Chapman in Newport Beach Sold GWG L Bonds to Retail Customers

Irvine, CA Claimants Are Pursuing Up To $500K in Damages from American Trust Investment Services

 Three Southern California investors have filed a six-figure Financial Industry Regulatory Authority (FINRA) arbitration claim against broker-dealer American Trust Investment Services over their GWG L Bond losses. The claimants, who are related, worked with former broker Kyle William Chapman, who was a registered investment adviser with Clarity Capital Partners in Newport Beach until July 2022. 

Our L Bond loss attorneys at Shepherd Smith Edwards and Kantas (SSEK Law Firm at represent these claimants in FINRA arbitration. A panel of three arbitrators in Los Angeles will hear their case.  

American Trust Investment Services Allegedly Misrepresented L Bonds As “Very Low-Risk” 

GWG Holdings L Bonds are risky junk bonds that more than 140 regional brokerage firms sell to customers all over the US. Unfortunately, GWG Holdings, Inc. filed for Chapter 11 bankruptcy protection in April 2022. Visit GWG Holdings, Inc. and GWG Holdings L Bonds for more information about this alternative asset firm and this investment.  L Bonds are unsuitable for many retail customers. 

 American Trust Investment Services was one of the broker-dealers that earned high commissions and fees for marketing and selling $1.6B of L Bonds to investors. In their FINRA arbitration claim, the investors contend that then-American Trust Investment Services broker Kyle Chapman allegedly misrepresented these life settlement-backed bonds as a “very low-risk placement of capital” while claiming that GWG always paid out interest payments and possessed lots of assets to safeguard against financing problems. He also falsely claimed that investors would be the first paid in the event of a bankruptcy filing and purportedly did not apprise them of all the risks they were taking on. 

 A few examples of the GWG L Bond risks include that they are: 

  • Speculative investments.
  • Unlisted, so they were never expected to be tradable on a stock exchange, and there was no real way to monitor their value.
  • Had indenture agreements eviscerated bondholders’ rights despite supposedly being secured by collateral.

GWG L Bond repayments were also allegedly Ponzi-like, which is something investors did not know.  

Broker-Dealer Failed to Properly Supervise Chapman

It appears that American Trust Investment Services may have lacked the proper systems in place so it could appropriately supervise Kyle Chapman.  These claimants are accusing American Trust Investment Services of alleged failure to supervise, unsuitability, negligence, breach of fiduciary duties, and misrepresentations and omissions. 

According to Kyle Chapman’s CRD, he worked for eight years in the industry. Other firms where he used to be an investment adviser and/or broker include Westpark Capital, Cetera Advisors Network, Larson Financial Securities, SagePoint Financial, Erman Retirement Advisory, and Larson Financial Group. He was an American Trust Investment Services broker From November 2020 to July 2022. 

Experienced GWG L Bond Investment Loss Lawyers

Throughout the US, SSEK Law Firm represents dozens of investors against many brokerage firms that sold GWG L Bonds. Our skilled FINRA lawyers and investment loss attorneys have the skills, experience, and resources, to pursue damages on behalf of our clients against these broker-dealers. 

Contact SSEK Law Firm at (800) 259-9010 and ask to speak with one of our skilled L Bond loss lawyers today.

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