David Escarcega’s Sale of More than $1.8 Million of GWG Renewable Secured Debentures Being Investigated

New Orleans stockbroker fraud attorney

In August 2014, FINRA filed a complaint against David Escarcega, an advisor in Phoenix, Arizona, concerning his marketing of more than $1.8 million of GWG Renewable Secured Debentures. Escarcega is currently a registered representative with Center Street Securities, Inc., a broker-dealer with 82 registered representatives. FINRA brought at least its fifth disciplinary action against a financial advisor for recommending GWG Debentures to clients. Escarcega is alleged to have represented the GWG Debentures as being low-risk, safe, and liquid, claims FINRA maintains are misleading.

Escarcega Alleged to have Misrepresented GWG Debentures

Between March 2012 and January 2013, Escarcega is alleged to have represented the GWG Debentures as being low-risk, safe, and liquid and/or guaranteed, claims FINRA maintains are untruthful misleading. Futhermore, David Escarcega’s recommendation of GWG Renewable Secured Debentures was ill-advised to his elderly and retired customers, conservative investors with low risk tolerance. Finally, David Escarcega also distributed misleading sales brochures for GWG Secured Debentures, FINRA reports. These materials stated that the products were secured by life insurance policies, which is false.

GWG Holdings Purchases Life Insurance Policies at Discount

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 buy in for GWG Renewable Secured Debentures was $25,000, and additional investment could be made in $1,000 increments. The GWG Renewable Secured Debentures have varying maturities, from six-months to seven-years, and are reportedly pay varying annual interest rates. What advisors may not tell you is that GWG Renewable Secured Debentures are illiquid, and investors do not have access to their principal investment, with exceptions for death, bankruptcy, or total disability of the investor. According to the prospectus for the GWG Renewable Secured Debentures, the life insurance policies held for the debentures are not collateral. Certain brokers marketing these products may have misrepresented to clients that the debentures were secured.

Investment Fraud Lawyers Investigating

The Peiffer Rosca securities attorneys often represent investors who lose money as a result of Ponzi schemes, investment fraud, or stockbroker misconduct. They are currently investigating the possibility of assisting victims with the recovery of their losses. They take most cases of this type on a contingency fee basis and advance the case costs, and only get paid for their fees and costs out of money they recover for their clients.

Investors who believe they lost money as a result of investment fraud or misconduct may contact the securities lawyers at Peiffer Rosca, Alan Rosca or Joe Peiffer, for a free, no-obligation evaluation of their recovery options, at 888-998-0520.

Broker: David Escarcega

Status: INVESTIGATED by Peiffer Rosca.

For brokercheck report and additional info click here!

Alan Rosca (1159 Posts)

Alan is a securities lawyer. He also teaches Securities Regulation at the Cleveland-Marshall College of Law. He focuses his legal practice on complex commercial and financial litigation and arbitration, particularly in the areas of securities and investment fraud. His office is in Cleveland, Ohio.


In our legal system, every person is innocent until and unless found guilty by a court of law or a tribunal. Whenever we reference “allegations” or charges that are “alleged,” such allegations or charges have not been proven, and are merely accusations, not findings of fault, as of the date of the blog. We do not have, nor do we undertake, a duty to continue to monitor or follow cases about which we report, and/or to publish subsequent blogs regarding various developments that may occur in such cases. Readers are encouraged to conduct their own research regarding any such cases and any developments that may or may not have occurred in such cases.