Robert Fontaine Suspended One Month, and Fined $10,000 (Including Disgorgement of $2,000 in Commissions) for Recommending Approximately $146,000 in GWG Debentures
Stockbroker Robert Fontaine, of Hubertus, Wisconsin and Freedom Investors Corporation, recommended and sold $146,000 of GWG Renewable Secured Debentures, an illiquid and high-risk alternative investment, in July 2013, the Financial Industry Regulatory Authority (FINRA) alleges. FINRA alleged that Fontaine had no acceptable basis for recommending these investments to his clients, and that said investments were unsuitable. Fontaine recently entered into a Letter of Acceptance, Waiver and Consent (AWC) with the FINRA Department of Enforcement in order to resolve allegations regarding securities violations. Fontaine has allegedly consented to the punishment.
GWG Holdings Purchases Life Insurance Policies on Secondary Market at Discount to Face Value of Policies
After purchasing life insurance policies on the secondary market, GWG then allegedly attempts to profit by collecting the face value of the policy when the insured passes away. However, in order to finance the purchases of these insurance policies, GWG borrows money from financial institutions or investors. GWG began issuing Renewable Secured Debentures in 2012 to sell to investors. The GWG Renewable Secured Debentures pay varying annual interest rates, from 4.75% to 9.50%. The GWG Renewable Secured Debentures, however, are illiquid, and investors do not have access to their principal investment, with exceptions for death, bankruptcy, FINRA reports. There is no secondary market for the GWG Renewable Secured Debentures, which are not suitable for an investor who needs more liquidity.
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, Jason Kane or Joe Peiffer, for a free, no-obligation evaluation of their recovery options, at (585) 310-5140.
Broker: Robert Fontaine
Status: INVESTIGATED by Peiffer Rosca.
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