Quote:
Originally Posted by mike1206?
This is Michael L. Whitaker of Michael Whitaker & Associates. I am writing to address some recent posts here (and comments to those posts) that contain misleading and outright false allegations about me, as well as misleading information regarding GWG L Bonds, an investment that some of my clients own. The purpose of this post is to provide readers with the relevant facts regarding myself and the services I provide to my clients in light of the false descriptions that some people have posted here. Unfortunately, I feel this response is necessary to defend my personal and professional reputation in hopes that readers are not misled by the false information in these postings.
First and foremost, I have been in the financial services field for 38 years. For about half of that time, I worked primarily in the insurance business and was not required to be registered with a broker-or investment advisor. I have a degree in finance from the University of South Florida and I am a Chartered Financial Consultant. I began my career in the financial services industry in 1984 in and around The Villages and have strived to provide each and every one of my clients with dedicated and client-focused advice and services. I have always strived to put the interests of my clients first and foremost. My investment recommendations are not driven by the commissions and fees that a particular investment may generate, but rather by what investments I reasonably believe are in the best interest of and appropriate for my clients, given their particular objectives, needs and circumstances. I do not charge my clients unreasonable or duplicative fees or commissions (as was falsely alleged in at least one of the postings).
It has been the honor and privilege of my lifetime to serve this community as a financial services professional. The false assertion that I would knowingly recommend a “scam” investment to any of my clients is as hurtful as it is wrong. Over the course of my career, the majority of the investments that I have recommended to my clients have performed well. However, as every investor must acknowledge, virtually all investments carry some risk with them. I am confident that you also would agree with me that financial advisors do not have a “crystal ball” and cannot be expected to accurately predict the future performance of the investments they recommend. Indeed, certain investments that were reasonable and appropriate when recommended may occasionally be adversely impacted by subsequent market forces outside of a financial advisor’s control. However, that does not mean that the investment recommendation, when made (often years earlier), was in any way improper or illegal.
Such is the case with GWG L Bonds, the investment that is mentioned in certain of the posts below. At the time that I made recommendations to certain clients to consider an investment in GWG L Bonds, that company had an outstanding track record of performance, and had never missed an interest payment or a redemption request. I submit to you that I had a reasonable basis for each recommendation I made to each client who purchased this product. However, subsequent events and market forces outside my control resulted in the issuer of the GWG L Bonds filing a Chapter 11 bankruptcy case in May 2022. This bankruptcy proceeding is ongoing, and the Debtor has advanced a bankruptcy plan to marshall the company’s substantial assets that, if approved, is likely to result in substantial distributions to investors. While the precise amount of any such distributions cannot be accurately predicted at this moment, it likewise cannot be accurately predicted whether, or to what extent, investors will ultimately realize any losses on this investment. Notably, the allegation that GWG is a “Ponzi-scheme” is not accurate and flat out false. In fact, many of the allegations posted here regarding GWG have been pulled directly from websites for attorneys attempting to solicit investors to file premature and opportunistic claims against their advisors who sold GWG L Bonds, while the company is in the midst of its efforts to return as much value as possible to its L Bond holders through the bankruptcy proceeding.
As many of you know, I pride myself on frequent communication with my clients, and the GWG situation has been no exception to that practice. I have continued to communicate with my clients regarding the status of their investments and any additional information as it becomes available. If you are interested in accurate information regarding the bankruptcy proceeding of GWG, you can find the website where all documents and updates from that proceeding are posted if you google "Donlin Recano GWG". It is the first link that comes up. Unfortunately, this thread will not allow me to include the link myself.
I am eternally grateful for the business and support my clients have shown me over the years, and I hope this additional information corrects and clarifies some of the false claims that have been posted about me recently on this forum. I invite you to contact me directly if you have any questions or want to discuss any of these issues.
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In response to your reply Michael
* Are you or are you not a fiduciary advisor? As stated in this thread you carry the CHFC does that make you a fiduciary advisor? You have told your clients that you are.
*Did you sell GWG L Bonds as a HIGH-RISK ALTERNATIVE product or did you sell it like my parents thought it was a SAFE product where their principle was safe from market loss.
You stated that you "Investment I reasonably believed are in the best interest of and appropriate for my clients" how can it be both High-risk per their prospectus and appropriate for your senior clients.
*SEC website states that GWG and brokers did not follow Reg Bl's - "Care Obligation: brokers did not exercise reasonable diligence, care and skill to understand the risk in selling GWG L Bonds.
*SEC 10/2020 subpoena GWG about their accounting practices and their merge with Beneficent. GWG used new investor money to support and develop Beneficent. 2022 GWG and Beneficent separated.
*FINRA states GWG L Bonds sales to elderly customer unsuitable. What is the average age of your customers? 70?
* You state "However, subsequent events and MARKET FORCES outside my control"
I found this NOT a creditable statement. GWG for the last 5 years in business had to use new bondholders' money to pay existing bondholders their monthly interest (Ponzi Scheme) they moved over $250 Million dollar to Beneficent (why the SEC started the investigation). GWG L Bonds were not sold on the open market so how could Market Forces have anything to do with its downfall?
* You stated that calling GWG Ponzi Scheme as a flat out lie. Then what do you call a company that Robs Peter to Pay Paul? It is a fact that the GWG told SEC that they needed to sell new bonds to pay their existing bondholders. According to the SEC website.
*You also stated that most of the information on the web about GWG is from lawyers that just want to sue brokers. I want you to know I have been researching GWG for all different sites, SEC, FINRA, WallStreet, lawyers, bloggers, and so on. All have stated that GWG L Bonds as a High-Risk investment and not suitable for seniors or conservative to moderate investors. I can't image all your hundreds of clients that you sold these junk bonds to are listed as Speculative Investors. Junk-bonds are the one of highest-risk
investment.
*What happens if GWG does file Chapter 7 Bankruptcy?
*RED FLAGs you should have caught. GWG stop buying new life policies in 2019 (made there no market for the L Bonds) GWG missed their annual report in 2020, SEC investigation into GWG 2020. If you were doing your Due Diligence shouldn't have known something was wrong? You didn't need a "crystal ball" you just needed to do what you told your clients that you do and act in their best interest.
My last question to you Michael is when YOU knew GWG missed their annual report in the early part of 2020 why didn't you investigate "WHY". Did you look into their company at all?
You had from 1/2020 to 12/2021 to get out, did you give your clients opportunity to sell their bonds even if there was a penalty to sell them? Because these bonds are not sold on the open market, they had to rely solely on you to get out during the open window.
How many clients are holding GWG with you, you once bragged that you have about have $10 million in GWG, to me that means you must have hundreds of clients holding their breath trusting in you that they will get their money back.
Last thing that really gets me is you don't want us to trust the facts the lawyers (you called them lying and misleading) are saying but didn't you in fact send an email to your clients from Newbridge lawyers about how you and Newbridge will come back and sue anyone that sues the two of you, that you will come back and sue them if GWG somehow comes out of this, can you explain that email?
I am not trying to beat a dead horse here, but I truly don't think you are being 100% up front with your clients or did you just turn a blind eye.