SEC Highlights That GWG Bonds Are Speculative Investments
A broker and his investment firm in Wausau, WI has been charged by the SEC after he was barred last year for defrauding clients.
Anthony B. “Tony” Liddle, (CRD# 5478479) and his company, Prosper Wealth Management, convinced at least 13 of his clients to invest money in L-Bonds sold by GWG Holdings of Dallas, TX. As we’ve blogged about previously, GWG Holdings ceased selling their speculative and risky L-Bonds prior to their bankruptcy in April of 2022. Liddle continued to “sell” L-Bonds even after the company suspended their sale. Most of his clients were senior citizens.
In the complaint, the SEC details Liddle’s pitches to his firm’s clients and his promises to “re-invest” their funds into L-Bonds. He sent these clients “interest payments” along with falsified statements that showed the clients how their “investments” were doing.
In reality, Liddle was not re-investing anything. He directed these clients to send him checks with the name of the specific investment in the check’s memo line that they believed he purchased for them. He set up a separate bank account from the firm’s accounts and hid it from his employees. This bank account was used to collect the funds, send out the “interest payments” through bank transfers, transferred funds into the other firm bank accounts, which also paid his salary. The secret bank account was also used for the rest of Liddle’s personal expenses. There were no investments of any kind.
GWG Bond Arbitration Claims
From June of 2019 through May of 2022, Liddle collected funds from at least 13 clients, and even convinced a few to send even more money for additional “low-risk investments.”
- In December of 2021, Liddle visited a client a nursing home and detailed an investment plan with handwritten notes. He offered the client a guaranteed monthly income on the 1st of every month from the L-Bonds. The client was unaware that GWG had suspended the sale of L-Bonds and gave Liddle a check for $110,000. He never invested in anything for this client.
- In May of 2021, just 30 days after GWG’s suspension of L-Bond sales, Liddle continued to sell them to his senior citizen clients, calling them “low-risk.” One such client filed an application and wrote him a check with the words “Safe Money Acct” in the check’s memo line.
- In June of 2021, Liddle lied to another client who gave him $40,000 to invest in L-Bonds after their sale was suspended. Liddle sent $185 monthly “interest payments” to this client, and also advised her to exit an annuity that he claimed was “high risk,” and reinvest those funds into something similar to L-Bonds. The client took this advice and in April of 2022, withdrew from the annuity and had to pay a 20% early withdrawal fee on the policy’s value.
- Another client in January 2022 received an email from Liddle informing her that her investment was safe and available for withdrawal. The client sent additional funds to him for investment, but no investment was made. Instead, Liddle simply kept the money for his own use.
Liddle was finally exposed by the daughter of one of his clients, asking fellow broker Brad Sarkauskas to review her parent’s accounts. Previously, Liddle worked for Brad Sarkauskas. The daughter noticed some irregularities, and in May of 2022, Prosper Wealth Management was audited by the Wisconsin Department of Financial Institutions Division of Securities (DFI.)
Liddle told investigators that the collected funds were “loans,” but did not give promissory notes to the clients, who told a different story to investigators.
DFI then permanently barred Liddle from working in securities in the state of Wisconsin, effective June 8, 2022. FINRA began its own investigation in June of 2022, but Liddle refused to cooperate with staff. After signing a Letter of Acceptance, Waiver & Consent, he was indefinitely barred from all FINRA broker-dealer affiliation in all capacities effective June 14, 2022.
Did You Invest With Tom Little Or Prosper Wealth Management?
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