FINRA Bars David J. Escarcega for Unsuitable Debenture Sales
An Arizona broker, David J. Escarcega, has been expelled from the industry by the Financial Industry Regulatory Authority (FINRA) for making unsuitable investment recommendations to clients.
According to InvestmentNews, between March 2012 and January 2013 Escarcega recommended debentures issued by GWG Holdings Inc. to 12 clients. The debentures were apparently linked to life insurance policies and considered high-risk debt instruments.
InvestmentNews reported that 11 of the 12 clients were retired and 9 were older than 70. The majority of the clients had an investment objective was “balanced/conservative growth.” Escarcega was accused of making misleading statements to at least seven clients.
In addition to being barred from the industry, FINRA sanctioned Escarcega $52,270, the amount he earned in commissions from the unsuitable investment recommendations.
According to BrokerCheck, during the relevant time, Escarcega was a registered representative with Center Street Securities based in Phoenix, Arizona.
GWG Renewable Secured Debentures – worth the risk?
The White Law Group continues to investigate broker dealers who may have unsuitably recommended GWG debentures to investors.
GWG Holdings has been offering up to $250,000,000 in Renewable Secured Debentures since 2012. This is a continuous offering with no minimum amount of debentures that must be sold before using any of the proceeds. The proceeds from the sale of the debentures are paid directly to GWG following each sale and will not be placed in an escrow account. The minimum investment is $25,000.
The prospectus states that investing in GWG Holdings debentures may be considered speculative and involves a high degree of risk, including the risk of losing your entire investment.
When brokers make unsuitable investment recommendations and squander client funds, the brokerage firm that employs them may be liable for failure to supervise and responsible for investment losses.
If you were a client of David J. Escarcega and suffered losses, The White Law Group may be able to help you by filing a FINRA arbitration claim. For a free consultation with a securities attorney call 888-637-5510.
The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida.
For more information on The White Law Group, visit www.whitesecuritieslaw.com.