Modern Wealth Management Broker Unsuitably Sold GWG L Bonds

Centaurus Financial is Respondent in Six-Figure FINRA Arbitration Claim

A Salt Lakes, Arizona investor, has filed a FINRA arbitration claim against Centaurus Financial over losses he sustained in GWG L Bonds. Offering documents for the investment named ex-Centaurus broker Otto Ramon Bohon. Recently, Bohon has locally been affiliated with Modern Wealth Management (formerly Catalina Investments) as a registered representative.

The claimant is seeking to recover up to $500K in damages. Our GWG L Bond lawyers are representing him in FINRA arbitration.

Our client and his spouse attended a retirement planning seminar hosted by former Catalina Investments Sr. VP Bruce Moore. The latter allegedly persuaded the couple to invest some of their retirement money in these risky junk bonds.

If you sustained losses in L Bonds, contact us today at Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyers.com). We can help you explore your legal options. More than 140 regional brokerage firms, including Centaurus Financial, partnered with managing broker-dealer Emerson Equity to sell over $1.6B of L Bonds to customers.

Misrepresentations, Omission, and Supervisory Failures Alleged

In his FINRA arbitration claim, this investor alleges misrepresentations, unsuitability, supervisory failures, omissions, negligence, and grossly negligent behavior. He contends that their financial advisor purportedly misrepresented this investment as not just low risk but also as a “foundational” investment that could reduce his entire portfolio’s risk level and minimize market volatility.

Instead, GWG Holdings has since suffered significant losses. The firm defaulted on $13.6M in payments and interest it owed L Bond investors. In April 2022, GWG filed for Chapter 11 bankruptcy protection.

The alternative asset’s financial woes have been going on for some time. By the end of 2020, GWG had more than $200M in outstanding senior debt and over $1.6B in outstanding L Bonds and other debt. This was the same year the US Securities and Exchange Commission (SEC) subpoenaed the company over concerns regarding its accounting practices and other alleged issues. Yet even after receiving the subpoena, GWG sold another $200M in L Bonds to investors.

Visit GWG Holdings, Inc. for more about the events leading up to its bankruptcy. Visit GWG Holdings L Bonds for more information about this illiquid product.

With GWG’s Money Woes, Investors’ Best Chance For Recovery is to File Their Own Claim

In a deal between Centaurus Financial and Emerson Equity, the firms shared up to 8% commission for the L Bond sales. Not only that, but the commission was scaled allegedly based upon the maturity date. This meant that Centaurus Financial had a financial incentive for selling the longest maturity dates available to maximize its revenue.

This is not the type of securities claim you should pursue without seasoned legal help. You will also want to file your own investor case against the broker-dealer whose financial advisor sold you GWG L Bonds. This individual is most likely affiliated with a local firm in your area like Modern Wealth Management in Tucson.

SSEK Law Firm has already filed several FINRA arbitration claims against Centaurus for customers who suffered L Bond losses. We also represent L Bond investors against NI Advisors, Center Street Securities, and other brokerage firms. If you worked with Modern Wealth Management broker Otto Ramon Bohon, call our skilled securities attorneys at (800) 259-9010 today.