{"id":81818,"date":"2022-06-17T01:22:56","date_gmt":"2022-06-17T05:22:56","guid":{"rendered":"https:\/\/www.hedgeco.net\/news\/?p=81818"},"modified":"2022-06-17T01:39:59","modified_gmt":"2022-06-17T05:39:59","slug":"brokerage-firm-allegedly-sold-13-3-million-worth-of-high-risk-bonds-to-retirees","status":"publish","type":"post","link":"https:\/\/hedgeco.net\/news\/06\/2022\/brokerage-firm-allegedly-sold-13-3-million-worth-of-high-risk-bonds-to-retirees.html","title":{"rendered":"Brokerage firm Allegedly sold $13.3 million worth of high-risk bonds to retirees"},"content":{"rendered":"\n<p>(HedgeCo.Net) The Securities and Exchange Commission has charged registered broker-dealer <strong>Western International Securities, Inc<\/strong>. and five of its registered representatives, or brokers \u2013 Nancy Cole, Patrick Egan, Andy Gitipityapon, Steven Graham, and Thomas Swan \u2013 with violating <a href=\"https:\/\/www.sec.gov\/regulation-best-interest\">Best Interest Obligation<\/a> regulations (commonly referred to as Regulation Best Interest or Reg BI) when they recommended and sold an unrated, high-risk debt security known as L Bonds to retirees and other retail investors.&nbsp;From July 2020 through April 2021, Western sold an aggregate of <strong>$13.3 million<\/strong> of L Bonds.<\/p>\n\n\n\n<p>The SEC\u2019s complaint alleges that, between July 2020 and April 2021, Western and the brokers recommended and sold L Bonds to retail customers, many of whom were on fixed incomes and had moderate risk tolerances, despite the issuer, GWG Holdings, Inc., stating the L bonds were high risk, illiquid, and only suitable for customers with substantial financial resources. The defendants allegedly failed to comply with Reg BI\u2019s \u201cCare Obligation\u201d both because they did not exercise reasonable diligence, care, and skill to understand the risks, rewards, and costs associated with L Bonds, and also because they recommended L Bonds to at least seven particular customers without a reasonable basis to believe the bonds were in their customers\u2019 best interests. The complaint also alleges Western failed to comply with Reg BI\u2019s \u201cCompliance Obligation\u201d because it did not adequately establish, maintain, and enforce written policies and procedures reasonably designed to achieve compliance with Reg BI.<\/p>\n\n\n\n<p>\u201cReg BI is clear: broker-dealers must act in the best interest of their customers,\u201d said Gurbir S. Grewal, Director of the SEC\u2019s Division of Enforcement. \u201cWhen they fail to do so, as we allege happened here, they put retail investors at risk and we\u2019ll hold them accountable.\u201d<\/p>\n\n\n\n<p>\u201cReg BI is an essential tool for the protection of the best interests of retail investors,\u201d said Regional Director, Daniel R. Gregus. \u201cProtecting retail investors is one of the fundamental duties of the SEC, and a top priority of the Chicago Regional Office.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"<p>(HedgeCo.Net) The Securities and Exchange Commission has charged registered broker-dealer Western International Securities, Inc. and five of its registered representatives, or brokers \u2013 Nancy Cole, Patrick Egan, Andy Gitipityapon, Steven Graham, and Thomas Swan \u2013 with violating Best Interest Obligation [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16,3,16048,16047],"tags":[],"class_list":["post-81818","post","type-post","status-publish","format-standard","hentry","category-hedgeco-networks-press-releases","category-hedgeco-news","category-hedgecovest-news","category-insider-trading-2"],"_links":{"self":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/81818","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/comments?post=81818"}],"version-history":[{"count":2,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/81818\/revisions"}],"predecessor-version":[{"id":81823,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/81818\/revisions\/81823"}],"wp:attachment":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/media?parent=81818"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/categories?post=81818"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/tags?post=81818"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}