As part of its ongoing investigation into the sale of GWG Renewable Secured Debentures, Fitapelli Kurta is investigating the sale of those products by broker David Escarcega. In August 2014, the Financial Industry Regulatory Authority, or FINRA, filed a complaint against David Escarcega concerning his marketing of more than $1.8 million of GWG Renewable Secured Debentures. David Escarcega is currently a registered representative with Center Street Securities, Inc.
According to the FINRA complaint against David Escarcega, the broker made misleading and false statements to seven customers between March 2012 and January 2013. Specifically, David Escarcega falsely told customers that the GWG Renewable Secured Debentures were sale, low-risk, illiquid and/or guaranteed. Futher, David Escarcega’s recommendation of GWG Renewable Secured Debentures was unsuitable to his elderly and retired customers, who had a conservative risk tolerance. Lastly, according to FINRA, David Escarcega also distributed misleading sales brochures for GWG Secured Debentures. These materials stated that the products were secured by life insurance policies, but this was false.
GWG Holdings purchases life insurance policies on the secondary market at a discount and is paid premiums when the policy holder dies. GWG Holdings, Inc. began selling a product called renewable secured debentures in 2012. The minimum investment in the GWG Renewable Secured Debentures was $25,000 and additional investments could be made in $1,000 increments. The GWG Renewable Secured Debentures have varying terms and interests rates. According to the prospectus for the GWG Renewable Secured Debentures, the life insurance policies held for the debentures are not collateral. When brokers, such as David Escarcega, marketed these products they falsely represented to clients that the debentures were secured. They, however, are not. In reality, they are illiquid, risky and unsecured investments, which are unsuitable for most retail investors.
If you or someone you know lost money investing in GWG Renewable Secured Debentures through either David Escarcega or Center Street Securities, Inc., please contact us for a free evaluation of your claim. The law may limit the time you have to seek recovery – do not delay.