Erez Law recently filed a FINRA arbitration against Western International Securities, Inc. related to GWG Holdings Inc. L Bonds investment losses.
The complaint is related to investment recommendations by Hagop Nalbandian (CRD #2921246) and Krikor Demirjian (CRD #4212275).
The Erez Law client, who were elderly retirees who entrusted the brokers with their irreplaceable retirement savings, alleges the following in the newly filed FINRA claim:
Erez Law alleges that the inexperienced and unsophisticated investors had very little understanding of the stock market or securities. The clients informed the brokers that they were relying on these funds to meet their retirement needs and that they were only interested in safe investments that would preserve their irreplaceable capital.
Regrettably, despite the investors’ retirement status, conservative risk tolerance and inability to replace lost capital, the brokers allegedly recommended a speculative and grossly unsuitable involving high risk and unsuitable investments. It is alleged that the brokers recklessly concentrating their retirement savings in illiquid investments including high risk private placement investments and other high commission products.
The complaint alleges that the brokers recommended the clients invest in speculative, illiquid and unsuitable private placement investments in GWG Holdings Inc. L Bonds.
The Erez Law complaint alleges that although the GWG Holdings Inc. L Bonds were marketed as and recommended by Western International Securities, Inc. and the brokers to investors as a safe investment offering reliable income payments and a guaranteed return of principal upon redemption, in reality, the L Bonds were non-conventional, unrated, illiquid private placement investments that were inherently high risk.
Financial advisors who sell private placements are often motivated to sell these investments by large commissions. Other than the rich commission that the brokers likely earned, it is alleged that there was no rational basis to recommend that the clients invest in this speculative and illiquid private placement. In fact, the L Bonds that the brokers recommended and sold to the clients paid significant commissions, upwards of 5%. Additionally, because the L Bonds were illiquid investments, there was no secondary public market for these offerings. As a result, investors’ ability to resell these bonds was extremely limited and/or non-existent.
Erez Law alleges that the brokers failed to adequately disclose the enormous risks associated with investing in the GWG Holdings Inc. L Bonds. On the contrary, the brokers assured the clients that the GWG Holdings Inc. bonds they recommended were safe investments that would generate consistent income. However, now that GWG Holdings Inc. has in fact filed for bankruptcy, L Bond investors, including the clients, cannot expect the return of his capital invested in the L Bonds.
As a result of the Chapter 11 Bankruptcy Plan, outstanding L Bond holders received interests in the GWG Holdings Inc. Wind DownTrust (WDT). More specifically, for each dollar of outstanding L Bonds (inclusive of principal and accrued and unpaid pre-bankruptcy interest) L Bold holders received one Series A1 WDT Interest. The Erez Law clients received Series A1 WDT Interests, which have a market value of zero, and they cannot expect the return of their capital invested in the L Bonds.
The complaint alleges that despite the clients’ advanced age, aversion to high risk investments and inability to replace lost capital, the brokers recommended a reckless and unsuitable investment strategy of recklessly concentrating their retirement savings in high commission illiquid and/or unsuitable investments, including annuities and high risk private placements private placements. It is also alleged that they failed to adequately disclose that the clients could lose most of their investment in the private placements the brokers recommended, and that their distributions could diminish significantly and/or cease altogether.
Some of the high commission, high risk, unsuitable and/or illiquid investments that the brokers recommended and sold to the clients include:
- Global Net Lease, Inc. f/k/a The Necessity Retail REIT, Inc. f/k/a American Finance Trust, Inc.
- Healthcare Trust, Inc.
- Peakstone Realty Trust f/ka Griffin Capital Essential Asset REIT f/k/a Cole Office & Industrial REIT
- MCI Preferred Income Fund II
- CIM Real Estate Finance Trust, Inc. f/k/a CIM Income NAV, Inc.
- Lodging Fund REIT III
Regrettably for the clients, it is alleged that the brokers continued to advise the clients to continue holding their investments. The brokers allegedly continually reassured the clients that their investments were poised for positive performance and strongly advised them to refrain from selling and continue to hold the investments.
In reality, most of the investments the brokers recommended and sold to the clients have suffered significant losses, have ceased paying dividends and/or are illiquid and cannot be readily sold at their reported share price.
Additionally, it is alleged that the brokers recommended and sold the clients unsuitable high commission annuities which needlessly locked the funds into the annuity for several years, despite their advance age of 80-plus. In fact, the clients’ investment in the Indextra annuity does not mature until 2034, by which time the clients will be 100 years old.
The complaint alleges that one possible explanation for the brokers’ recommendation and sale of these unsuitable investments is the exorbitant commissions that are often generated from the sale of such products.
Hagop Nalbandian Investigation
Hagop Nalbandian has been a registered representative of West International Securities, Inc. in Encino, California, since 2008.
Previously, he was registered with Financial West Group in Encino, California, from 2007 to 2008, and with Linsco/Private Ledger Corp. in Encino, California, from 2005 to 2007, when he was terminated regarding, “in response to denial of complaint, customer alleged that representative forged his signature on withdrawal form to take his 2006 RMD from a jackson national annuity.”
He has been the subject of six customer complaints, between 2007 and 2024. The most recent complaints are regarding, according to his CRD report:
January 2024. “Misrepresentation of investment.” The customer is seeking $5,000 in damages.
December 2022. “Unsuitability; Negligence.” The customer sought $5,000 in damages, and the case was settled for $150,000.
December 2021. “Unsuitability.” The customer sought $5,000 in damages, and the case was settled for $108,500.
June 2015. “Client is seeking $90,000 in potential gains from other investments that should have been purchased. The investment occurred in September 2008 and the client has experienced no out-of-pocket losses. client is seeking to gain opportunity costs from the market over six years. Firm denies the allegations.” The customer sought $90,000 in damages, and the case was settled for $20,000.
Krikor Demirjian Investigation
Krikor Demirjian has been a registered representative of West International Securities, Inc. in Encino, California, since 2008.
Previously, he was registered with Financial West Group in Encino, California, from 2007 to 2008, and with Linsco/Private Ledger Corp. in Encino, California, from 2005 to 2007, when he was terminated regarding, “In response to denial of complaint, customer alleged that representative forged his signature on withdrawal form to take his 2006 RMD from a Jackson National annuity.”
He has been the subject of three customer complaints, between 2007 and 2021. The most recent complaint is regarding, according to his CRD report:
December 2021. “Unsuitability.” The customer sought $5,000 in damages, and the case was settled for $108,500.
How to File a Claim Against Western International Securities, Inc. Brokers Hagop Nalbandian and Krikor Demirjian
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If you have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.
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