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