For the past six months our firm has handled dozens of calls from concerned investors after IHC and its affiliated investments stopped paying distributions. However, many investors continue to believe that they do not need to hire an attorney for a variety of reasons – mainly that someone is working on their behalf and that their funds will just be returned to them without having to hire an attorney.
The fact is that investments that fail under suspicious circumstances involving the failure to disclose use of funds have an extremely poor track record of future success. Case in point, GWG Holdings. Similar to IHC, in April 2022 GWG entered bankruptcy. At that time many brokerage firm representatives told their clients that GWG would just restructure in bankruptcy and would repay investors. Fast forward a couple of years and it turns out investors would only receive approximately 2.7 to 3.45% of their invested amount. Those who trusted their advisors recommendations to stay put have found that many of the firms that recommended GWG are now out of business themselves – remedies that existed had they acted sooner are now gone. IHC is likely to follow a similar path with brokerage firms telling their clients not to take action to client detriment.
Broker-dealers and registered representatives have independent duties under FINRA rules and state securities laws to ensure that any recommended investment is suitable for the particular investor. Those duties apply regardless of how a product is described by the issuer or packaged in offering documents – which sellers are obligated to investigate. Many investors have reported to us that these products were presented to them as relatively stable, income-oriented alternatives suitable for retirement portfolios.
Common issues raised to our firm by investors include:
- Recommendations to retirees or conservative investors despite the product’s illiquidity and risk profile
- Over-concentration of client assets in a single alternative investment or sponsor
- Failure to adequately disclose liquidity restrictions, valuation uncertainty, and dependency on continued capital inflows
- Reliance on issuer marketing materials without meaningful independent due diligence
- Inadequate supervision of advisors selling complex private offerings
Given these developments our firm encourages investors to reach out to explore their legal rights and potential recovery options.
Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. At Gana Weinstein LLP, our attorneys are experienced representing investors who have suffered securities losses due to the mishandling of their accounts. Claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover.