Brokerage Firm Allegedly Pursued Commissions over Customers’ Best Interests
Three Illinois retirees have filed a Financial Industry Regulatory Authority (FINRA) arbitration claim against Moloney Securities, pursuing up to six figures in damages for bond losses sustained in GWG Holdings L Bonds. The two brokers, Shane Michael DeSherlia and Dale Erbin Timmerman, allegedly unsuitably recommended these risky junk bonds to the retirees. DeSherlia in Jerseyville, Illinois, is a registered investment adviser with Moloney Securities Asset Management, whereas Timmerman is associated with Timmerman & Co. in Vandalia, Illinois.
Our professional L Bond investment loss attorneys at Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyrs.com) represent these elderly investors in their FINRA arbitration claim against Moloney Securities. An arbitrator will preside over their case in Chicago.
Moloney Securities Brokers Allegedly Misused Claimants’ Trust to Sell Them High-Risk Investments
The three investors, and many others that purchased $1.6B of L Bonds, have been blindsided by significant bond losses. Many allege that they were never fully aware of the risks or told that GWG was in financial trouble. In early 2022, GWG Holdings defaulted on $13.6M owed to investors and filed for bankruptcy protection in April. Visit GWG Holdings, Inc. and GWG Holdings L Bonds to learn more.
DeSherlia, the financial advisor for two claimants, an older retired couple, had a personal relationship with them before becoming their broker. He allegedly unsuitably recommended these risky high-yield bonds to them, knowing they were inexperienced, conservative investors and should never have been placed in this type of investment. He reportedly misled them into thinking this was a safe, low-risk proposition. DeSherlia doesn’t appear to have been properly supervised by anyone at his firm.
Meanwhile, Timmerman, who is a CPA, and the other investor—an elderly widow—have had a professional relationship for years. He allegedly recommended GWG L Bonds to her even though she did not have the right investing profile for this type of complex, speculative investment. He also failed to properly apprise her of the risks, including the Ponzi-like nature of L Bond repayments. Again, allegedly lax supervision by Moloney Securities appears to have been a factor.
Brokerage Firms May Have Failed to Conduct Proper Due Diligence into L Bonds
Moloney Securities is one of more than 140 regional brokerage firms that have earned high commissions from selling L Bonds to customers, including public retail investors and conservative retirees, who should never have invested in these life settlement-backed bonds. In this FINRA arbitration case, the claimants alleging misrepresentations, negligence, omissions, unsuitability, failure to supervise, and other broker misconduct.
Why You Should File Your Own GWG L Bond Claim Against Your Broker-Dealer
GWG has been in financial trouble for a while. Not only has it been late with submitting regulatory filings, but it remains under investigation by the US Securities and Exchange Commission (SEC). Even with GWG’s chapter 11 bankruptcy filing, it is unlikely that investors will recover enough from the company.
As an L Bond investor, your best bet is to pursue an individual FINRA arbitration claim against your broker-dealer who profited from selling you these risky speculative products. At SSEK Law Firm, our GWG L Bond loss attorneys represent dozens of investors against the many brokerage firms that sold them these high-yield bonds. We are dedicated to fighting for our clients’ maximum financial recovery in FINRA arbitration.
How Do You Recover Your L Bond Losses?
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