David Escarcega, formerly of Center Street Securities, Has Expulsion from Securities Industry Upheld
Have you lost money with financial advisor David Escarcega of Phoenix, Arizona? We are investigating allegations made by FINRA, the Financial Industry Regulatory Authority, against David J. Escarcega. FINRA barred Escarcega after he was alleged to have made false and misleading statements in connection with the sale of GWG Renewable Debentures. Escarcega, who sold the GWG Debentures from March 2012 to January 2013, was alleged to have told investors that these investments were guaranteed or safe.
Escarcega appealed a 2016 decision by FINRA to bar him from the securities industry. A panel reviewed his case and upheld the decision to bar him.
GWG Holdings, Inc. purchases life insurance policies on the secondary market, at a discount from the policy owner. GWG then hopes to make a profit by collecting the face value of the policy when the insured passes away. However, in order to finance the purchases of these insurance policies, GWG borrows money from financial institutions or investors.
GWG began issuing Renewable Secured Debentures in 2012 to sell to investors. The GWG Renewable Secured Debentures have varying maturities, from six-months to seven-years, and are purported to pay annual interest rates from 4.75% to 9.50%. However, the GWG Renewable Secured Debentures are illiquid, and investors do not have access to their principal investment, with exceptions for death, bankruptcy, or total disability of the investor. There is no secondary market for the GWG Renewable Secured Debentures either. The prospectus for the GWG Debentures states that this investment is generally not suitable for an investor who needs their invested funds to be liquid.
FINRA has punished numerous financial advisors for the sales of GWG Debentures. David Escarcega was barred from the securities industry and fined $52,270.
On March 14, 2016, the Securities Division of the Arizona Corporation Commission brought a complaint against Escarcega. The complaint alleged that Escarcega sold more than $4 million worth of GWG Debentures, and that such Debentures were speculative and illiquid.
David Escarcega was a financial advisor and registered representative of Center Street Securities from March 2010 to March 2015. He worked at branch offices in Phoenix and Gilbert, Arizona.
Brokerage firms like Center Street Securities have a responsibility to adequately supervise all representatives who are registered through their firm. Brokerage firms also must take steps to ensure that their financial advisors follow all securities rules and regulations, as well as internal firm policies. When brokerage firms fail to adequately supervise their registered representatives, they may be liable for investment losses sustained by customers.
Israels & Neuman PLC is a securities and investment fraud law firm with offices in Denver, Colorado and the Seattle area. We represent investors in FINRA arbitration proceedings in all 50 states, including investors in Arizona and throughout the Phoenix area. Our attorneys have represented over one thousand investors against many brokerage firms in the past.
Click to view: Escarcega, David FINRA Order July 2017
Click to view: Escarcega FINRA AWC
Click to view: Escarcega BrokerCheck 3.3.16
Click to view: Escarcega AZ Comp (1)
If you lost money with David Escarcega or Center Street Securities, please CONTACT US at 720-599-3505 for a free evaluation of your case.
Israels & Neuman, PLC is a private law firm and is not affiliated with any government or law enforcement agency. Any investigation referenced in this blog is independent in nature and is being conducted by our law firm privately, not in conjunction with any government or law enforcement agency. All information contained in this blog should be deemed statements of opinion derived from the author’s review of public records, not statements of fact. This blog is advertising material and does not create an attorney client relationship, nor does it constitute legal advice. Everyone’s situation is different and the question of whether or not you have a claim will vary on a case-by-case basis. In contingent representation, clients may still be liable for costs.