Articles Tagged with Center Street Securities

shutterstock_155045255The law offices of Gana Weinstein LLP are investigating claims concerning allegations made by the Financial Industry Regulatory Authority (FINRA) that Michael Wurdinger (Wurdinger), from approximately February 2012, to February 2013, Wurdinger failed to adequately supervise sales of GWG Renewable Secured Debentures (GWG), an illiquid and high-risk alternative investment in violation of NASD Rule 3010 and FINRA Rule 2010. As a result of FINRA’s investigation Wurdinger was suspended for six months.

Wurdinger was associated as a securities principal with Center Street Securities, Inc. (Center Street) from June 2009, until April 2013, when he resigned. Since November 4, 2013, Wurdinger has been associated as with Wells Fargo Advisors, LLC. Center Street has 84 registered representatives and 67 branches offices nationwide.

As a background, GWG Holdings, Inc. purchases life insurance policies on the secondary market at a discount to the face value of the policies. Once purchased, GWG pays the policy premiums until the insured dies. GWG then collects the face value of the insurance benefit and the company hopes to earn returns by collecting more upon the maturity of the policies than it has paid to purchase the policy and service the premiums. FINRA found that the company has a limited operating history and has yet to be profitable.

The Financial Industry Regulatory Authority (FINRA) sanctioned broker Center Street Securities, Inc. (Center Street) concerning allegations that the firm failed to establish, maintain, and enforce adequate supervisory systems and written supervisory procedures to monitor the use of external email accounts to conduct firm-related business by the firm’s registered representatives.  The firm was fined $30,000.

Center Street has been a FlNRA member since February 7, 1991 and employs approximately 84 registered persons out of 74 branch offices.  Center Street’s principal office is in Nashville, Tennessee.  Center Street sells variable life insurance and annuities, mutual funds, private placements, options, corporate equities, debt securities, U.S. government securities and municipal securities.

The duty to supervise is a critical component of the securities regulatory scheme.  The duty to supervise is an affirmative responsibility of all brokerage firms.  The SEC has found that effective supervision by a broker-dealer must provide effective staffing, efficient resources and a system of follow-up and review to determine that any responsibility to supervise is being diligently exercised.  Evidence that there is a variance between the conduct called for by a firm’s procedures and the actions actually undertaken by a firm supports a finding of liability and failure to supervise.

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