Dave Smith (CRD# 850797), a broker registered with Intervest International Equities, has been named in multiple investor disputes alleging unsuitable investment recommendations, negligence, and breach of fiduciary duty. These claims center around investments in high-risk, complex products called GWG L Bonds. As an experienced financial writer, I aim to shed light on this situation and provide valuable insights for investors.
According to a Bloomberg analysis, investment fraud and bad advice from financial advisors cost Americans up to $17 billion per year. Knowing how to recognize and avoid these pitfalls is crucial for protecting your financial well-being.
Allegations and Case Details
In 2024, four groups of investors filed disputes against Dave Smith, seeking over $1.7 million in total damages. The claims allege that Smith recommended unsuitable investments in GWG L Bonds, engaged in improper conduct, breached his fiduciary duty, and acted negligently. These disputes are currently pending.
Additionally, in 2023, Smith’s firm settled a separate GWG L Bond dispute for $102,500. The investor in that case alleged misrepresentations, omissions of material facts, unsuitable investment advice, breach of fiduciary duty, and failure to act in the client’s best interest.
Understanding GWG L Bonds
GWG Holdings, the issuer of L Bonds, raised money to purchase life insurance policies on the secondary market. The company’s own prospectus disclosed that L Bonds were complex, risky products “only suitable for persons with substantial financial resources and with no need for liquidity.” In April 2022, GWG Holdings filed for bankruptcy. The company also disclosed it was under investigation by the SEC.
Recovery Options for L Bond Investors
Despite the bankruptcy, investors who lost money in GWG L Bonds may be able to recover damages by filing a FINRA arbitration claim against the brokerage firm that marketed the products to them. Firms have an obligation to conduct reasonable due diligence on products they recommend and to ensure investments are suitable for each client’s risk tolerance and financial situation. Investors who prevail in a FINRA claim can still participate in any distributions from the GWG bankruptcy proceedings.
Dave Smith’s Background
According to FINRA BrokerCheck, Dave Smith has been a registered broker since 1978. He is currently the President of Intervest International Equities based in Colorado Springs. Prior to Intervest, Smith was affiliated with several other firms including Security Distributors and Ausdal Financial Partners. His Intervest website bio states that he started providing financial planning services to military personnel in Europe in 1977 after serving in the military himself.
“Trust is the glue of life. It’s the most essential ingredient in effective communication. It’s the foundational principle that holds all relationships.” – Stephen R. Covey
Did You Know? A 2020 study found that 1 in 25 financial advisors have a past record of misconduct, and advisors with misconduct records are 5 times more likely to engage in new misconduct compared to the average advisor.
The GWG L Bond situation serves as a cautionary tale about the risks of complex, high-commission products and the importance of working with trustworthy financial professionals who prioritize their clients’ best interests. Investors should always research an advisor’s background and regulatory history before entrusting them with their hard-earned savings.
If you invested in GWG L Bonds through Dave Smith or any other financial advisor and suffered losses, don’t hesitate to explore your legal options. Firms can be held liable for their broker’s misconduct. Consider discussing your situation with an experienced securities attorney at Haselkorn and Thibaut (1-888-784-3315) to understand your rights and potential recovery options.
Remember, submitting a complaint does not guarantee a recovery, but it’s an important step in holding bad actors accountable and protecting other investors from harm. Trust your instincts, ask questions, and don’t be afraid to seek help if something doesn’t seem right with your investments. Your financial security is worth fighting for.
