Claimant Says He Was Never Apprised of the Risks Involved in GWG ‘Junk’ L Bonds
A retired Missouri worker has filed a six-figure Financial Industry Regulatory Authority (FINRA) arbitration claim against Titan Securities and its broker, Rodger Sprouse, over losses sustained in GWG L Bonds. The claimant, who is on disability and was forced to stop working after an injury, is an inexperienced investor.
The claimant contends that Titan Securities and Sprouse allegedly unsuitably recommended these illiquid, speculative junk bonds without fully informing him about the risks. Sprouse is also the owner of Sprouse Financial in Lee’s Summit.
In April 2022, GWG Holdings, Inc. filed for Chapter 11 bankruptcy. GWG had issued $1.6B of life settlement-backed bonds to investors. The move for bankruptcy protection comes in the wake of defaulting on the many millions of dollars it owes L Bond investors, a slew of regulatory issues, and other problems.
Our GWG L Bond investment attorneys at Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyers.com) represent this claimant in FINRA arbitration. An arbitration panel will hear the case in Kansas City.
Retiree Was an Inexperienced Investor Who Needed Safe Investments
This claimant heard about Titan Securities and Rodger Sprouse while listening to a radio program. During an in-person meeting with the Titan Securities broker, the retiree was very clear about being an inexperienced investor who:
- Was not rich
- Needed safe investments
- Would be entrusting most of his liquid assets to the broker-dealer
Sprouse allegedly claimed to be an expert in retirement planning, which is how he purportedly has marketed himself in the media. The Titan Securities broker also allegedly used the fact that the claimant was religious during their discussions.
Instead of investing this retired worker in safe investments, Titan Securities and Sprouse allegedly unsuitably recommended the high commission GWG L Bonds and other non-liquid products. They allegedly failed to warn this investor of the risks, but they also purportedly neglected to disclose the Ponzi-like nature of bond repayments.
These repayments came solely from newer L Bond investors’ payments to purchase this product. Also, Sprouse allegedly made these investment recommendations in concentrations that were far from appropriate or suitable for this claimant.
The supervision, in this case, was allegedly inexcusable, with no purportedly meaningful communication involving an actual supervisor or any compliance until it was too late. This Kansas City investor alleges unsuitability, concentration, misrepresentations and omissions, failure to supervise, negligence, and grossly negligent behavior in his FINRA arbitration claim.
Titan Securities Financial Advisor Has Other Customer Disputes On Record
According to Rodger Sprouse’s BrokerCheck record, he has worked in the industry for 14 years. He has several disclosures noted, including:
- 4/2020: A $43K settlement was reached with one investor over her structured cash flow product from Future Income Payments (FIP) after the latter’s collapse.
- 2/2019: A case also involving a FIP structured cash flow product. This investor received a $158K settlement.
- 1/2011: A life settlement claim that was settled for nearly $47K. This was significantly more than the $12K that the claimant sought.
Three other customer disputes involving Sprouse were either denied or withdrawn. Sprouse is both a registered broker and investment advisor. Other firms where he used to work include Evolve Investment Advisors, Evolve Securities, Stonehurst Securities, and Envision Investment Advisors.
Seasoned GWG L Bond Attorneys
Our knowledgeable GWG L Bond securities lawyers represent several investors whose brokers and financial firms unsuitably recommended these high-yield bonds to customers. These financial firms include Titan Securities, Center Street Securities, NI Advisors, and Centaurus Financial. Some 145 regional brokerage firms partnered with Emerson Equity to sell L Bonds to investors, and we are going after all of them.
SSEK Law Firm works with investors throughout the US and would be happy to help you explore your options during a free, no-obligation case assessment. To speak with one of our skilled GWG L Bond attorneys, call (800) 259-9010 today.