Erez Law is currently investigating financial advisor Henry Wieniewitz (CRD# 4469542) regarding losses sustained from investments in 1st Global. He also goes by Trae Wieniewitz. Wieniewitz was registered with Taylor Capital Management Inc. in Knoxville, Tennessee from 2010 to January 2016. He has been unregistered with FINRA since that time, but has alleged to have been operating his own firm Wieniewitz Financial (Wieniewitz Wealth Management), which is based in Knoxville, Tennessee.
According to public records, former customers of Wieniewitz recently filed a FINRA arbitration against Wieniewitz and his firm. The group of investors, many of which were elderly or nearing retirement, seek $1.8 million in damages for losses sustained from investment recommendations in the unregistered promissory notes issued by 1st Global and 1st West Capital, affiliated small business lenders in Hallandale, Florida. According to the complaint, Wieniewitz recommended 1st Global notes to conservative investors, touting their safety and described them as low-risk, short-term investment alternatives with a guaranteed return of 7-9% or more and with no risk of default. It is alleged that Wieniewitz never disclosed to his clients or potential clients that 1st Global notes were not registered or that the company was being investigated for securities fraud. The investors are seeking more than $1.7 million in losses.
It is alleged that customers across the country were offered cash advances through a network of unregistered brokers and financial advisors. The two companies provide small businesses with unsecured, short-term commercial financing, averaging 9 months and at a yield of 10%, and memorialized by promissory notes. The companies provide quick, small business loans of up to $500,000 and serve a variety of business sectors, including automotive, e-commerce, events, franchise, hospitality, restaurant and transportation. The promissory notes were marketed as safe, short term, fixed income investments that could generate above average rates of returns for investors.
1st Global Capital (also known as 1st Global Capital Financial Services) and 1st West Capital filed for bankruptcy in July 2018 following a Securities and Exchange Commission (SEC) investigation into an alleged $283 million loan fraud. Investors are classified as creditors and will not receive a distribution of any assets unless approved by the bankruptcy court. If distributions do occur, they will likely be cents on the dollar and take many years to come to fruition.
The SEC and the Southern District of Florida U.S. Attorney’s office opened an investigation into alleged securities laws violations, including the offer and sale of unregistered securities, the sale of securities by unregistered brokers, and by the commission of fraud in connection with the offer, purchase and sale of securities. The SEC is investigating whether the loans sold to retail investors required registration and whether the loans were sold to investors through unregistered brokers.
The United States Attorney opened a parallel investigation into the business practices of 1st Global Capital and 1st West Capital.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, brokerage firms around the country may be liable for investment or other losses suffered by its customers.
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If and 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.