National investment loss lawyers KlaymanToskes is investigating LifeMark Securities Corporation and its financial advisors in connection with the sale of GWG L Bonds. In late July 2024, LifeMark and its registered representative, Geoffrey “Geoff” Wolterstorff, were censured by the Securities and Exchange Commission (“SEC”) for violating Regulation Best Interest (“Reg BI”) obligations. These violations resulted in significant financial losses for retail investors who were sold the high-risk, illiquid L Bonds.
KlaymanToskes believes bondholders’ ideal option to maximize their recovery of losses is through the filing of a FINRA arbitration claim. The law firm is currently representing many GWG L Bondholders throughout the nation in FINRA arbitration claims against the brokerage firms and financial advisors that recommended the speculative L Bonds.
If you suffered losses due to unsuitable recommendations to invest in GWG L Bonds contact KlaymanToskes at 888-997-9956 or fill out a short contact form for a free and confidential consultation to discuss your potential recovery options.
The SEC found that LifeMark and its financial advisors failed to meet their Reg BI obligations by recommending GWG L Bonds without adequately ensuring the investments were in the best interest of their clients. According to the SEC, LifeMark advisors neglected to consider the financial conditions outlined in GWG’s own prospectus, which warned that the bonds involved a “high degree” of risk and that investors could lose their entire investment.
The violations extended to Wolterstorff’s failure to educate himself about the L Bonds, despite clear red flags surrounding GWG’s financial stability. For instance, GWG temporarily halted the sale of L Bonds in April 2021 due to reporting irregularities, and its November 2021 Supplement Prospectus raised “substantial doubt” about its ability to continue operations. Just months later, in January 2022, GWG defaulted on its obligations, leading to its Chapter 11 bankruptcy filing in April 2022.
The SEC found that LifeMark and Wolterstorff violated multiple provisions of Reg BI, including the Care Obligation and the General Obligation. As a result, the SEC imposed the following penalties:
The SEC’s investigation disclosed that LifeMark failed to properly supervise its financial advisors, including Wolterstorff, to ensure compliance with industry standards. Many LifeMark advisors may have recommended L Bonds to retail investors, including retirees and those with moderate risk tolerance, despite the product being unsuitable for such clients.
In one particularly egregious case involving Wolterstorff, a semi-retired 63-year-old investor who explicitly stated that he did not want to risk his principal was recommended a $50,000 L Bond investment, funded by the client’s retirement savings. This recommendation ignored both the client’s financial objectives and the clear warnings in GWG’s prospectus, resulting in the client losing their investment shortly thereafter.
The repercussions of GWG’s L Bonds continue to devastate retail investors who trusted LifeMark advisors to act in their best interests. Many investors were individuals saving for retirement or seeking stable income, only to face substantial financial losses after being sold these unsuitable and high-risk products.
If you were sold GWG L Bonds by LifeMark Securities or any of its financial advisors, contact KlaymanToskes at 888-997-9956 or fill out a short contact form for a free and confidential consultation to discuss your potential recovery options. Investors with losses in GWG’s L Bonds resulting from recommendations by any other full-service brokerage firm are also encouraged to contact our firm for a free consultation.