SEC Files Lawsuit Against California Advisor, Robert Vance for Sale of GWG Holdings Bonds
On September 30, 2024, The U.S. Securities and Exchange Commission (SEC) reportedly filed a lawsuit against a California-based financial advisor, Robert Vance. The agency is accusing him of violating securities laws by selling $4.3 million in risky bonds issued by GWG Holdings, a now-bankrupt company based in Dallas.
The SEC’s complaint, filed on Friday, alleges that Vance, a former representative with Moloney Securities in Sonoma, California, failed to comply with Regulation Best Interest when he recommended GWG Holdings’ high-risk L bonds to 53 clients between 2020 and 2022.
Unsuitable Investments – GWG L Bonds
Many of these clients were allegedly at or near retirement, raising concerns about the suitability of the investments.
Vance, who is reportedly no longer registered with the Financial Industry Regulatory Authority (FINRA), purportedly has a history of 17 customer complaints on his BrokerCheck record, mostly related to issues of investment suitability and negligence. These complaints reportedly include damage claims in the six and seven figures, some of which have been settled, while others are still pending.
The White Law Group has represented numerous investors who lost money investing in GWG L Bonds. GWG Holdings has been at the center of multiple regulatory actions in recent years. Several other advisors have also been fined by FINRA for selling GWG bonds.
Before 2018, GWG Holdings’ business model involved “life settlements” which is purchasing life insurance policies from consumers, paying their premiums, and collecting the proceeds when the insured individuals passed away.
Significant Losses
The company later pivoted to alternative investments, issuing L bonds to fund its operations. These bonds were sold through broker-dealers, but the firm soon began to experience significant losses, including a $215 million loss reported on its 2020 Form 10-K. GWG filed for bankruptcy in April 2022.
GWG L bonds were unrated, carried terms ranging from two to seven years, and offered fixed interest rates between 5.50% and 8.50%, depending on the term. The bonds were described as highly speculative and risky, with GWG warning investors in a 2021 prospectus about the company’s uncertain future.
Despite the company’s risk disclosures, Vance recommended $3 million worth of L bonds to at least 40 customers from July 2020 to April 2021, and another $1.2 million to 13 additional clients between December 2021 and January 2022.
High Risk and High Commissions
The SEC claims that Vance either disregarded or misunderstood the risks associated with the bonds. In several cases, he allegedly recommended the investments to clients nearing retirement, with the bonds representing significant portions of their net worth.
The complaint also revealed that GWG paid commissions of 3.25% to 5% on each L bond sold, with Vance reportedly earning 80-90% of those commissions through an LLC he controlled. In total, he is said to have collected around $200,000 in commissions from these sales.
FINRA BrokerCheck – Robert Vance
The FINRA BrokerCheck tool is a free online tool that allows investors to research and verify the background and credentials of financial brokers, brokerage firms, and investment advisors registered with FINRA.
Investors can use the tool to verify whether a broker or brokerage firm is registered with FINRA, as well as to review their employment history, licensing status, and any regulatory actions or complaints filed against them.
Robert Vance was reportedly registered with the following brokerage firms during his career in the securities industry:
06/15/2016 – 11/15/2023 MOLONEY SECURITIES CO., INC. (CRD#:38535) Sonora, CA
10/28/2011 – 05/31/2016 RIDGEWAY & CONGER, INC. (CRD#:113055) NEW WOODSTOCK, NY
08/01/2003 – 11/01/2011 BFT FINANCIAL GROUP, LLC (CRD#:109121) SONORA, CA
Broker Due Diligence
Under the “Regulation best interest” standard, broker-dealers are obligated to perform due diligence when evaluating any investment. If your financial advisor fails to perform due diligence on an investment before recommending it to you, they could be held liable for investment losses.
If your advisor unsuitably recommended an investment offering and you lost money, the securities attorneys at The White Law Group may be able to file a complaint for you. You may be able to recover losses by filing a FINRA Arbitration claim against the brokerage firm that sold you the investment.
Free Consultation with National Securities Attorneys
If you have suffered investment losses with Robert Vance and Moloney Securities, the securities attorneys at the White Law Group may be able to help you. For a free consultation with a securities attorney, please call (888) 637-5510.
About the White Law Group
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm dedicated to helping investors in claims in all 50 states against their financial professional or brokerage firm. Since the firm launched in 2010, it has handled over 700 FINRA arbitration cases.
Our firm represents investors in all types of securities related claims, including claims involving stock fraud, broker misrepresentation, churning, unsuitable investments, selling away, and unauthorized trading, among many others.
With over 30 years of securities law experience, The White Law Group has the expertise to help investors to recover their securities fraud losses.
Last modified: September 30, 2024
