Formed in 1998 and headquartered in Chicago, Illinois, Arete Wealth Management is a full-serve independent broker-dealer directly owned by Arete Wealth, Inc. One of the fastest growing broker-dealers, in 2021, Arete Wealth acquired Center Street Securities, a Nashville-based securities broker-dealer with $1.04 billion in assets under management (AUM). After the acquisition, Arete Wealth, Inc. grew to $5.5 billion in AUM and 265 registered representatives nationwide.
Arete Wealth Management has $8.5B in assets under advisement (AUA), with 97 offices, and 318 wealth advisors, and 35+ alternative investments (as of July 25, 2022). The firm serves all 50 states as well as the District of Columbia, Puerto Rico, and the Virgin Islands.
Financial Misconduct at Arete Wealth Management
Arete is licensed by the Financial Industry Regulatory Authority (FINRA), and as such is legally obligated to ensure its brokers are acting lawfully in the interest of their investors. If a client suffers losses as a result of negligent behavior or misconduct from a broker, then the firm may be held legally responsible to repay the damages.
If a broker makes an unsuitable investment recommendation or fails to adequately disclose the risks associated with an investment, they may also be liable for investment losses. Each investment must be suitable for the specific investor, taking into consideration the investor’s age, net worth, risk tolerance, experience, and financial needs. Arete has a history of failing to do just that.
In 2021, a FINRA arbitration panel awarded a former customer of Arete and his trust a whopping $515,061.98 and legal fees for GPB private placement fraud. GPB Capital Holdings was allegedly running a $1.5B Ponzi scheme. Arete was found to be guilty for breach of fiduciary duty, omission of facts, suitability, failure to supervise, and negligence.
The firm was also alleged to unsuitably invested its clients in GWG Holding’s Series L Bond, risky investments that are unrated and considered to be speculative. Since L Bonds are not publicly traded, they cannot be liquidated, which means that investors have no way of liquidating or selling them should they need cash. Additionally, without being publicly traded, L Bonds aren’t subject to the same regulatory examination. GWG filed for Chapter 11 bankruptcy protection in April 2022 after failing to provide bondholders with $13.6M in interest and maturity payments. Arete allegedly failed to perform necessary due diligence prior to recommending these bonds and customers were not given in-depth insight into the risks and value of them.
Wondering If You Have a Claim? Contact Our Firm Now!
Meyer Wilson reclaimed $350 million for the victims of investment fraud or misconduct. Our attorneys are experienced in going up against large investment firms, and our track record affirms our resources and expertise. Meyer Wilson has represented clients nationwide and internationally, in state and federal courts, and in arbitration through FINRA and the American Arbitration Association (AAA). As an investor, you have a right to recover investments lost through unethical behavior or decisions made against your interests.