What Did Your Brokerage Firm or Investment Adviser Do Wrong With GWG
Published On: March 7, 2022

Chicago-based Stoltmann Law Offices represents investors who’ve suffered losses from dealing with financial advisors who recommended investments linked to Russia with inappropriate risk for their clients. Financial advisors sometimes ignore the political risk of the investments they are selling at great peril to their clients. Case in point was the recent massive devaluation of Russian bonds that resulted from Vladimir Putin’s invasion of Ukraine, which triggered a punitive wave of sanctions from the U.S. and European Union.

Certain Russian bond prices were cut to zero after the country’s invasion of Ukraine. That was also bad news for investors in those bonds, who were forced to add more cash to margin brokerage accounts since the securities could no longer be used as collateral. Further, Moody’s the credit rating agency, cut Russia’s credit rating to Ca, which is one step above full default.

The Swiss wealth manager UBS “is calling on some investors to add either cash or securities to their portfolio after cutting the lending value of some Russian bonds to zero, people with knowledge of the matter said,” according to Yahoo Finance. Here’s more bad news for UBS clients and holders of certain Russian bonds: “UBS may liquidate the securities at market value for those clients that can’t meet the additional requirements, the people said, asking not to be identified as the matter is private.”

With margin accounts, brokers can require investors to add cash or securities to a portfolio that may include borrowed funds or securities when the market value drops to a certain level, often during a market crash. Such a downturn triggers a “margin call,” which gives the broker the ability to sell client holdings if they are “unable or unwilling to deposit the funds.” In either case, margin calls usually lead to significant investment losses.

Furthermore, there are numerous exchange-traded funds that have considerable exposure to Russia and the Russian economy. No surprise, these ETFs have cratered, including Franklin FTSE Russia ETF (FLRU), iShares MSCI Russia ETF (ERUS), VanEck Russia ETF (RSX), VanEck Russia Small-Cap ETF (RSXJ), and Wisdom Tree Emerging Markets High Dividend Fund (DEM).

Has your financial advisor sold you money-losing or overpriced investments or traded without your permission? FINRA and the SEC have strict rules on disclosing risk profiles on all investments sold by brokers and investment advisers. If they fail to fully inform you of downside risk or vet shady companies offering investments, you may have a case in arbitration.

Firms are also legally required by FINRA to monitor and supervise what their brokers are selling – their investments must be vetted and authorized by the firms – and have an obligation to investors to fully reveal true risk and return information about the vehicles sold. Broker-dealers and advisors are also required to fully vet all of the investments they are selling to determine if they are suitable for your age and risk tolerance. Investors can file FINRA arbitration complaints if these rules are broken. You can often avoid rogue broker-advisors by checking their backgrounds through BrokerCheck,

If you invested with a financial 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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If you have suffered financial losses because of the negligence or fraud of your financial advisor or broker through unsuitable investment recommendations, over-concentration, churning, misrepresenting risks, conversion or selling away, you have legal rights and options to pursue recovery of those losses.

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