Lion Street Financial, LLC – Regulatory History & Private Placement Investigation
The White Law Group is investigating the securities sales practices of Lion Street Financial, LLC (CRD#: 165828), a FINRA-registered broker-dealer headquartered in Austin, Texas. The firm has sold high-risk alternative investments, including private placements such as GWG L Bonds, which have led to significant losses for retail investors.
Lion Street Financial has faced regulatory scrutiny over these sales, including a 2024 SEC action tied to violations of Regulation Best Interest.
SEC Sanction – GWG L Bond Sales
On November 15, 2024, the Securities and Exchange Commission (SEC) issued a cease-and-desist order against Lion Street Financial for failing to comply with Regulation Best Interest in connection with its sales of GWG L Bonds.
According to the SEC’s findings, Lion Street and other firms recommended GWG L Bonds to retail clients without fully understanding or disclosing the risks of the products. The SEC noted that GWG’s offerings were illiquid, high-risk, and unsuitable for many retail investors, especially retirees and conservative clients.
The SEC ordered Lion Street Financial to pay a $55,000 civil penalty and imposed supervisory undertakings to strengthen compliance with Regulation Best Interest.
Private Placements & Alternative Investment Risks
- Illiquidity – Investors typically cannot sell these securities on a secondary market.
- High Commissions – Broker-dealers often receive 7–10% in selling compensation, creating conflicts of interest.
- Speculative Nature – Products like GWG L Bonds are tied to complex business models that can collapse under financial strain.
- Suitability Issues – Many investors were not informed that these investments could be inconsistent with their objectives and risk tolerance.
Broker Duties & Potential Claims
Broker-dealers like Lion Street have a duty to ensure that the investments they recommend are suitable and in the best interest of their clients. If your broker recommended high-risk products such as GWG L Bonds without proper due diligence or disclosure, you may be able to recover losses.
Claims are often pursued through FINRA arbitration, an alternative to class action lawsuits that allows investors to seek recovery directly from brokerage firms.
Free Consultation with Securities Attorneys
If you suffered losses investing with Lion Street Financial or in GWG L Bonds, contact The White Law Group at (888) 637-5510 for a free consultation. Our attorneys represent investors nationwide in FINRA arbitration claims involving unsuitable investment recommendations, alternative investments, and supervisory failures.
For more information, visit www.whitesecuritieslaw.com.
FAQs – Lion Street Financial
What is Lion Street Financial, LLC?
Lion Street Financial is a Texas-based broker-dealer that sells securities including alternative investments and private placements.
Why are GWG L Bonds risky?
GWG L Bonds were speculative debt instruments tied to the life insurance secondary market. GWG Holdings filed for bankruptcy in 2022, leaving investors with massive losses.
Can investors recover losses from Lion Street Financial?
Yes, investors may pursue recovery through FINRA arbitration, alleging unsuitable recommendations, failure to supervise, or violations of Regulation Best Interest.
