Phillip C. Anderson Sanctioned by FINRA for Unsuitable GWG L Bond Recommendations

Phillip C. Anderson, a former General Securities Representative with CRD No. 814936, violated FINRA Rules 2111 and 2010 by recommending unsuitable investments in speculative GWG L Bonds to two senior retail customers. According to FINRA, Anderson’s recommendations concentrated large portions of the customers’ net worth in these high-risk, illiquid products. FINRA imposed a five-month suspension, a $10,000 fine, and ordered Anderson to disgorge $8,280 in commissions.

Anderson began his career in the securities industry in 1982. In June 2018, he registered with Kingswood Capital Partners, LLC, where he remained until June 2023. Although he is no longer associated with any FINRA member firm, Anderson remains subject to FINRA’s jurisdiction under its By-Laws.

FINRA Rule 2111 requires brokers to recommend investments that are suitable based on a customer’s financial profile, including age, income, risk tolerance, and liquidity needs. For example, recommending a high-risk product to a customer with limited net worth or low risk tolerance can violate the rule. FINRA Rule 2010 requires brokers to conduct business with integrity and fairness.

In March 2019, Anderson recommended GWG L Bonds to two elderly clients. One client invested $96,000, representing at least 96% of her net worth, while the other invested $88,000, amounting to 35% of his net worth. Both clients had moderate risk tolerances and balanced growth objectives. The L Bonds were speculative, unrated, and highly illiquid, making them inappropriate for investors with limited financial means or lower risk appetite. FINRA found Anderson’s recommendations to be unsuitable and inconsistent with the customers’ investment profiles, especially considering GWG’s poor financial history and later bankruptcy.

Lufrano Law, LLC is a national investment litigation firm and has experience representing investors who have investment disputes with brokers and broker-dealers. Please contact us at (800) 627-2179 for more information if you have been the victim of investment negligence or fraud.

The content on this site reflects personal opinions and does not constitute statements of fact. No findings have been made against the firms or individuals mentioned. This blog is intended solely for educational purposes, drawing on publicly available information to provide general insights and a basic understanding of the law. It is not a substitute for legal advice.

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