Complaint Pending Against Yvonne Zhong After Sale of GWG L-Bonds

• August 29, 2022
• Ni Advisors

Yvonne Zhong (CRD#: 3203120) is a registered Broker at Ni Advisors in Los Gatos, CA.

Broker’s Background

She entered the securities industry in 1999 and previously worked for Cetera Investment Services, LLC; LPL Financial, LLC; AXA Advisors, LLC; Ni Advisors; UCB Investment Services, Inc.; Supertrade Securities, Inc.; Golden Stream Securities, Inc.; and Youngblood Securities Corp.

Current And Past Allegations Of Conduct Leading To Investment Loss

According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in June 2022, a customer dispute was filed against Yvonne Zhong. The allegation states, “During 2019-2021, claimants bought a total of $900,000 of GWG L-Bonds from representative. The firm GWGH is currently experiencing financial difficulties and the claimants allege breach of contract, unsuitable recommendation, failure to supervise, etc.” Damages of $5,000 are requested, and the customer dispute is pending.

In addition, Yvonne Zhong has been the subject of one customer complaints, including the following:

• April 2018 — “Client alleges misrepresentation of product.” The customer dispute was denied.

For a copy of Yvonne Zhong’s FINRA BrokerCheck, click here.

We Help Investors Recover Investment Losses

Financial advisors have a legal and regulatory obligation to recommend only suitable investments that are appropriate for their clients’ needs and objectives. Their employing brokerage firm has a legal and regulatory obligation to supervise the Financial Advisors’ sales practices and dealings with clients. To the extent any of these duties are breached, the customer may be entitled to a recovery of his or her investment losses.

GWG Holdings (GWGH) formally defaulted on its obligation to L bondholders on February 14, 2022. Red flags were raised among investors after the company notified them that no interest or dividend payments would be made in January 2022, nor would maturity or redemption requests be honored, making the L bonds virtually worthless. On April 20, 2022, the Dallas company, which made a name for itself through life insurance bond sales, filed for bankruptcy protection after financing arrangements could not be made. This is a disastrous outcome for unsecured stock and bond holders as all income payments have ceased and the opportunity for principal recovery appears unlikely.

Retail investors in these privately issued, high-interest L bonds purchased more than $1B worth of them through more than 100 broker-dealers. But these alternative securities were created as high-risk, speculative investments–not typically suitable for low-risk tolerance investors who count on the liquidity of their securities. GWG Holdings bought life insurance policies through secondary sales using money raised by L bond sales; when the life insurance policies paid out, those funds repaid investors.

In February 2022, GWG Holdings defaulted on $13.6 million in payments and interest that it owed to investors and has since filed for bankruptcy protection, leaving clients with large, unexpected losses.

The Wolper Law Firm, P.A. represents investors nationwide in securities litigation and arbitration on a contingency fee basis.  Matt Wolper, the Managing Principal of the Wolper Law Firm, P.A., is a trial lawyer who has handled hundreds of securities cases during his career involving a wide range of products, strategies and securities. Prior to representing investors, he was a partner with a national law firm, where he represented some of the largest banks and brokerage firms in the world in securities matters. We can be reached at (800) 931-8452 or by email at mwolper@wolperlawfirm.com.