This full-service broker-dealer works with high-net-worth individual investors and institutional investors. Founded in 2003 and headquartered in San Mateo, California, Emerson Equity, LLC also sponsors companies with private placement offerings and provides managing broker-dealer services. The firm has investment professionals located all over the United States.
In 2020, Emerson Equity became the managing broker-dealer and lead seller for GWG Holdings, Inc. In a Soliciting Dealer Agreement, Emerson agreed to help the alternative asset firm sell L Bonds to investors. As part of the agreement, the brokerage firm is said to have committed to soliciting about two million L Bond units in a public offering with about $2B total principal. Emerson then partnered with more than 140 regional brokerage firms to sell these risky private placements to thousands of customers, including retail investors and retirees.
Our brokerage firm negligence lawyers and broker negligence attorneys represent investors wishing to pursue Financial Industry Regulatory Authority (FINRA) arbitration claims against Emerson Equity and its financial advisors over significant investment and bond losses caused by broker fraud, misconduct or negligence. Please contact Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyers.com) today so we can help you explore your legal options.Emerson Equity Pays over $1.7M Over Alleged Supervisory Failures Involving Mutual Fund Trades
According to Emerson Equity's CRD, the brokerage firm has been the subject of one regulatory case. In early 2022, FINRA found that Emerson Equity allegedly engaged in poor supervision involving short-term mutual fund trades from 2015 to 2020. As a result of this purported negligence, one Emerson broker made at least $1.6M in unnecessary fees during that time.
The self-regulatory organization (SRO) fined the firm $60K. Emerson CEO Dominic Baldini was fined $5K. The broker-dealer was also ordered to pay at least $1.6M in restitution to the harmed customers. Emerson Equity did not deny or admit to FINRA's findings.Why is Emerson Equity Under Scrutiny Over Its Role Selling GWG L Bonds?
In its audited financial statement for 2021 to the SEC, the brokerage firm reported problems involving an unnamed financial offering that could affect its financial future. In February 2022, GWG Holdings defaulted on $13.6M of payments it owed L Bond investors. It filed for Chapter 11 Bankruptcy protection in April 2022.
According to its website, Emerson Equity helps companies looking to sell private placements conduct due diligence reviews, prepare offering documents, and obtain solicitor-dealer agreements with other brokerage firms as a managing broker-dealer. Emerson shared the high commissions and fees with the many regional broker-dealers that sold L Bonds to their customers. Emerson Equity has been accused of aggressively marketing these life-settlement-backed investments to these other firms and its customers.
A few questions to consider regarding Emerson's role in promoting and selling L Bonds to investors:
- Did Emerson ignore (or fail to notice) the financial problems plaguing GWG Holdings in recent years?
- Did the firm ensure that the regional brokerage firms and all investors were properly apprised of the risks involved and GWG's financial woes?
- Did Emerson Equity disregard the best interests of investors because of its desire to meet its sales agreement with GWG Holdings and earn the high fees?
Many Emerson Equity wholesalers tasked with promoting L Bonds are no longer with the firm.
Now, L Bond investors are grappling with bond losses in an investment that was likely never suitable for many of them. Many are saying they were never fully apprised of the risks.
SSEK Law Firm represents many GWG L Bond investors against these brokerage firms.Emerson Equity Brokers Face Numerous GWG L Bond Claims
Emerson Equity brokers also directly sold L Bonds to their customers. An example of one Emerson financial advisor who has already been named in FINRA arbitration claims over L Bond losses is Tony Barouti. Based out of Los Angeles, he is also CEO of Barouti Financial.
According to Tony Barouti's CRD, in 2022 alone, he was involved in eight customer disputes. Collectively the claimants are seeking over $4M in damages.
Barouti is not the only Emerson Equity financial advisor who sold GWG L Bonds to investors.Skilled Brokerage Firm Arbitration Attorneys
For over 30 years, our broker misconduct attorneys and bond loss lawyers have fought for investors in FINRA arbitration, mediation, and litigation against the brokerage firms and financial advisors responsible for their investment and bond losses. We represent high-net-worth individual investors, institutional investors, and retail customers. SSEK Law Firm has recovered millions of dollars on behalf of thousands of clients.
If you are an investor and want to determine whether you have grounds for a claim against Emerson Equity in Southern California, call (619) 378-4616. Throughout the US, call (816) 916-3424 today and ask for your free, no-obligation initial case assessment.