According to FINRA’s allegations, former financial advisor Jonathan Greenfield made various false and misleading statements to customers regarding GWG Renewable Secured Debentures.
The Financial Industry Regulatory Authority (FINRA) filed an order issuing a disciplinary proceeding against Jonathan Jay Greenfield (CRD# 2591266) in December 2014. Greenfield submitted an Offer of Settlement to FINRA, which FINRA accepted on November 12, 2015. Without admitting or denying FINRA’s allegations, Greenfield consented to FINRA’s entry of findings, violations, and sanctions.
Greenfield became associated with Arete Wealth Management in March 2010. Arete terminated Greenfield’s registration with the firm on December 6, 2013. According to FINRA, from March 2012 until October 2012, Greenfield “recklessly and at times intentionally made material misrepresentations and omissions” to firm customers. Specifically, these alleged misrepresentations and omissions involved the details of GWG Renewable Secured Debentures.
GWG Holdings, Inc. is a corporation that purchases life insurance policies at a discount of face value. The policies that GWG purchases are kept by the corporation and premiums paid on the policies until the insured individual dies. Once the insured individual passes away, GWG gets whatever the face value of the insurance benefit is. GWG’s business model then is to make money by collecting more money upon death than it paid to purchase, finance, and service the policy.
GWG began selling Renewable Secured Debentures in 2012. These investments are complex, illiquid, not directly secured by life insurance policies, and overall incredibly risky. This type of investment is also automatically renewed unless the investor provides written notice otherwise.
According to FINRA, Greenfield emailed between 50 and 75 of his customers inviting them to a dinner where he would give a sales pitch regarding GWG Debentures. FINRA evaluated these emails, and stated that the representations Greenfield made in them to his customers were “materially false and misleading.” Greenfield allegedly referred to the Debentures as “very good,” “safe,” and involved “no fluctuation in principal” on various occasions. Greenfield also allegedly made misleading statements regarding the Debentures in a brochure he distributed to 12 customers.
According to FINRA, Greenfield’s alleged misconduct was a failure to observe high standards of commercial honor and just and equitable principles of trade. Greenfield consented to FINRA’s sanction of a bar from the securities industry.
