What Did Your Brokerage Firm or Investment Adviser Do Wrong With GWG
Published On: October 25, 2021

Chicago-based Stoltmann Law Offices is representing investors who’ve suffered losses from dealing with broker-advisors who’ve sold bonds from Puerto Rico.

In the case of Eugenio Garcia Jimenez, Jr., the US Securities and Exchange Commission (SEC) charged Garcia, who is based in Orlando, Florida, with defrauding the Municipality of Mayagüez, Puerto Rico and misappropriating $7.1 million of taxpayer funds.

According to Investment News, Garcia opened an account at LPL in 2016 “to further his scheme to defraud his client, the Municipality of Mayagüez, Puerto Rico. LPL did not verify certain identification documents before opening the account, although it was required to do so by its own procedures,” according to the SEC. Jimenez, Jr., is not directly affiliated with LPL.

LPL Financial recently settled charges from the SEC that it violated anti-money laundering rules in connection to an unregistered investment adviser, with LPL paying more than $4.8 million, Investment News added.

With more than 19,000 financial advisers, LPL is the largest independent US brokerage firm. “Due to shortcomings in a variety of supervisory issues, ranging from record keeping to fingerprinting of non-registered employees and supervision of advisers’ consolidated reports,” FINRA fined LPL $6.5 million last year.

Three years ago, FINRA, the US securities industry regulator, fined LPL Financial $2.75 million for “failing to list dozens of customer complaints against its brokers and for not filing hundreds of suspicious activity reports in its anti-money laundering program.” Although LPL “was in possession of suspicious and conflicting customer account information, according to the SEC’s order, LPL received assets transferred from a previous firm and processed wire transfers resulting in Garcia’s further misappropriation of millions of dollars from the municipal corporation.”

LPL did not admit or deny the SEC’s findings. In agreeing to settle the SEC’s charges, it will pay $4.1 million directly to the Mayagüez municipal corporation and a civil penalty of $750,000.

In recent years, the widespread sale of Puerto Rican bonds has created a mountain of litigation due to broker abuses and poor disclosure of the risks involved in purchasing them. Earlier this year, for example, FINRA ordered UBS to pay two investors and a holding company $4.8 million over sales of UBS closed-end funds that contained Puerto Rican bonds. The wave of litigation and regulatory actions is expected to continue for some time.

If you invested with a broker-advisor and lost money as a result, you may have a claim to pursue through FINRA Arbitration. Please contact Stoltmann Law Offices, P.C. at 312-332-4200 for a free, no obligation consultation with a securities attorney. Stoltmann Law Offices is a contingency fee law firm which means we do not get paid until you do!


The posting on this site are mere OPINIONS and NOT statements of fact in any way whatsoever. The information should not be relied upon and there have been no findings made against the firms or individuals referenced on this site. In addition, this Blog is made available for educational purposes only and incorporates information from the web as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand that there is no attorney client relationship between you and Stoltmann Law Offices (161 N Clark Street 16th Floor Chicago, IL 60601). The Blog opinions should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.


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