In February, 2016, the Financial Industry Regulatory Authority (“FINRA”) announced that David Escarcega of Phoenix, AZ, and associated with Center Street Securities had been barred for his role in selling GWG secured debentures.
On February 29, 2016, a panel of FINRA’s Office of Hearing Officers issued a decision ordering that David Escarcega be barred from association with any FINRA member firm.
The hearing panel found that the GWG Debentures were illiquid, speculative investments involving a high degree of risk, and not suitable for investors that had any need for liquidity before the maturity date.
From 2012 to 2014, David Escarcega sold over four million dollars of the GWG Debentures to over fifty investors, and received nearly $150,000 in commissions from those sales.
News of the decision was reported in a filing by the Arizona Corporations Commission.
David Escarcega’s registration and disciplinary history
In order to lawfully sell investments to the public, one must either be registered or exempt from registration.
David Escarcega was registered with:
According to FINRA’s CRD disclosure report, David Escarcega has been the subject of two customer complaints and one regulatory investigation.
The Law Office of David Liebrader practices exclusively in the field of investment loss recovery. For the past 23 years, we have dedicated our law practice to assisting investors who have been victims of investment fraud via fraudulent and unsuitable investment transactions. During that time we have recovered money for over one thousand individuals, pension plans, trusts and companies. The recoveries we have obtained via judgments, awards and settlements on behalf of our clients exceed $40,000,000.
When investors contact our firm they can expect prompt attention, and a detailed analysis of their issues. Typical claims that we are asked to review involve “unsuitability (where a financial advisor makes investment recommendations that are inconsistent with a customer’s investment objectives), claims for “churning” (where a broker enters into an excessive number of trades for the purpose of generating commissions), claims involving illiquid investments such as private placements (I.e., real estate investment trusts, limited partnerships, equipment leasing and oil and gas drilling programs) as well as claims for violations of state securities laws, which often provide investors remedies like attorney’s fees and interest, if they are successful on the claim.
Since a Supreme Court ruling in the 1980s, most investment related disputes between brokerage firms and their customers have been filed in an arbitration forum hosted by FINRA Dispute Resolution. FINRA, along with the SEC, serves as a securities industry “watchdog” and regulator. Most brokerage firms require their clients to sign binding arbitration agreements, mandating that any disputes between them be arbitrated at FINRA.
Investors pursuing claims at FINRA typically advance claims related to suitability. FINRA rules require that all registered representatives make suitable investment recommendations to their clients. Other claims are based on negligence or breach of fiduciary duty, while another category includes claims based on misrepresentations and fraud. Most claims filed with FINRA are resolved within 15 months, and oftentimes, the cases are resolved via settlement or mediation in under a year.
FINRA’s rules require that all investment recommendations made by licensed financial advisors be suitable in light of a customer’s needs, objectives and risk tolerance. In addition, all registered representatives are required to be properly supervised, with periodic inspections and reviews by qualified supervisors, whose job it is to vigorously investigate suspicions of wrongdoing (red flags).
If you suspect that you have been the victim of investment fraud, or had a financial advisor recommend unsuitable investments to you, call us today for a free, confidential consultation at (702) 380-3131.