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Zamansky Investigates Tony Barouti and Emerson Equity for GWG Holdings L Bond Fraud
As part of our law firm’s investigation of Emerson Equity and other entities connected to GWG Holdings L Bonds, Zamansky, LLC was published in Businesswire, announcing our investigation of Tony Barouti.
Barouti, of the Barouti Foundation, is a representative of Emerson Equity, and is a lead broker-dealer and underwriter of L Bonds. As our other articles report, pursuing claims of alleged securities fraud, investment fraud, misrepresentation, breach of fiduciary duty and other sales violations towards GWG L Bond holders.
Investigation Update: On 4/20/22 GWG Holdings declared bankruptcy after being defaulting on approximately 13.6 million dollars connected to the L Bonds.
What GWG Holdings L Bond Investors Need to Know about the Allegations Against Tony Barouti and Emerson Equity
Who Is Tony Barouti?
Tony Barouti, whose formal name is Ahmad Agha Barouti, is a securities broker who is currently under investigation for alleged investment fraud in relation to his sale of GWG Holdings L bonds. Our firm’s investigations have revealed that Barouti promoted and sold these high-risk bonds to retirees and other retail investors for whom they were not at all suitable investments. In doing so, it appears that Barouti allegedly misrepresented the risks involved and encouraged his clients to invest despite knowing that doing so could lead to substantial and unrecoverable losses.
What Is Tony Barouti’s Background?
Tony Barouti is a securities broker who is registered with the Financial Industry Regulatory Authority (FINRA) and is licensed to sell securities in Arizona, California, Georgia, Illinois, Kansas, Maryland and New Jersey. According to FINRA’s records, he has been employed by Emerson Equity LLC as a broker since 2017.
FINRA’s records also show that Tony Barouti has been employed by California firms such as First Heartland Capital Inc., LPL Financial LLC and Newport Coast Securities Inc. within the past 10 years. He previously served short stints with several securities firms at San Diego and Los Angeles securities firms, including Commonwealth Financial Network, Brookstreet Securities Corporation, Jefferson Pilot Securities Corporation, Linsco/Private Ledger Corp., World Group Securities Inc., and WMA Securities Inc. In total, Barouti has worked for nine separate firms in his 22-year career in the securities brokerage industry.
Tony Barouti has faced two customer disputes during his career as a FINRA-registered broker (although this may change very soon in light of what our firm has uncovered regarding Barouti’s sale of GWG Holdings L bonds). Both disputes, one of which was withdrawn and one of which was closed due to inactivity, involved allegations that Barouti misrepresented investment products to his clients.
What Is Tony Barouti’s Relationship with Emerson Equity?
As a securities broker for Emerson Equity, Tony Barouti is suspected of providing investors with misleading information regarding the risks associated with GWG Holdings L bonds. Despite the allegations against Barouti, he remains employed by the firm according to FINRA.
What are the Claims Against Emerson Equity?
Another important aspect of the GWG Holdings L bond saga is the company’s relationship with Emerson Equity LLC and other broker-dealers. These include Aegis Capital, LLC; Centaurus Financial, Inc.; NI Advisors; and Western International Securities, Inc., among others.
In addition to pursuing a GWG Holdings lawsuit, L bond investors who have suffered losses may also be entitled to pursue claims against their broker-dealers.
Federal securities laws and FINRA regulations require broker-dealers to conduct appropriate due diligence before recommending investment products to their customers. This includes both conducting due diligence on the investment product generally and determining whether the product is suitable to each individual customer who receives a recommendation.
Emerson Equity is a broker-dealer and investment advisory firm headquartered in San Mateo, California. Established in 2003, it has been registered with FINRA and the SEC since 2004. On its website, Emerson Equity describes itself as, “a leading boutique investment firm with clients ranging from high net worth individuals and institutional investors, to sponsor companies that bring private placement offerings to market.”
In 2020, Emerson Equity entered into a Soliciting Dealer Agreement (SDA) with GWG pertaining to the sale of L bonds. Under the SDA, Emerson Equity agreed to, “use its best efforts to solicit subscriptions in connection with the public offering . . . for up to 2,000,000 units of L Bonds . . . at a public offering price of $1,000 per Unit, representing $2,000,000,000 in aggregate principal.”
Our investigation has uncovered that Emerson Equity brokers received substantial commissions for the sale of L bonds, which may be why brokers such as Tony Barouti touted them so aggressively. If Emerson Equity and its brokers were aware of the risks associated with GWG’s L bonds—which appears to be the case—then the firm and its brokers deserve to be held liable for investors’ losses. In 2021, Emerson Equity consented to sanctions and entry of a finding that the firm failed to establish and maintain an adequate supervisory system for its brokers.
According to reports, Emerson Equity LLC and other firms received commissions ranging from 0.75 percent to 5 percent for selling L bonds. These firms also reportedly received additional compensation totaling up to 8 percent of the gross proceeds from their L bond sales.
Based on GWG Holdings’ history, it appears that Emerson Equity LLC; Aegis Capital, LLC; Centaurus Financial, Inc.; NI Advisors; Western International Securities, Inc. and others may not have conducted adequate due diligence before recommending L bonds to their customers. If this is the case, investors who suffered GWG L bond losses may be able to pursue FINRA arbitration claims against these firms—in lieu of or in addition to pursuing a GWG Holdings lawsuit.
Do Investors Have Claims Against Tony Barouti for GWG L Bond Fraud?
Based on our investigations, it appears that GWG Holdings L bond investors who purchased their bonds through Tony Barouti may have claims for fraud. In particular, we believe that many L bond investors may be eligible for a lawsuit against Barouti based on:
- Failure to disclose the GWG L bond investors could lose their entire principal
- Misrepresentations that GWG L bonds offered “guaranteed” returns
- Recommendations to purchase L bonds when these high-risk bonds were not suited to investors’ moderate or conservative risk profiles
As Tony Barouti’s employer, Emerson Equity may be liable for investors’ losses suffered due to Barouti’s apparent fraud. When you contact us, our attorneys will conduct a comprehensive assessment of your legal rights, and we will determine if you should pursue a claim against Tony Barouti, Emerson Equity, GWG Holdings or all of the above.
Why GWG L Bond Investors Should File for FINRA Arbitration Against Emerson Equity and Tony Barouti
Our firm’s investigations have uncovered evidence that strongly suggests that GWG Holdings misled investors on multiple fronts. This includes misleading investors about both the firm’s financial condition and the risks associated with the firm’s L bonds. To recover their losses, many investors are taking action by filing individual claims in FINRA arbitration. At Zamansky LLC, we are strongly encouraging investors to pursue this option.
The Benefits of FINRA Arbitration for L Bond Fraud Claims Against Emerson Equity and Tony Barouti
What are the benefits for GWG L bond investors of individually pursuing FINRA arbitration? Some of the most notable advantages include:
- The Potential for Great Financial Recovery – By hiring their own attorneys to pursue FINRA arbitration, L bond investors can maximize their financial recovery potential. Attorneys representing individual investors in FINRA arbitration will seek full compensation for their clients’ individual losses.
- The Potential for a Quick Resolution – FINRA explains, “arbitration is usually faster than most court cases.”
- The Ability to Pursue Claims Against GWG Holdings and Emerson Equity – To date, our firm is not aware of any class action lawsuits targeting Emerson Equity. Yet, based on the available evidence, it appears that many L bond investors have claims against the firm. In addition to filing claims against GWG Holdings, L bond investors can pursue claims against Emerson Equity in FINRA arbitration as well.
Schedule a Free Consultation about Your GWG L Bond Loss Claim Against Tony Barouti or Emerson Equity
If you purchased an L Bonds through Emerson Equity LLC suffered losses from GWG Holdings L bonds, you should contact investment fraud attorney Jake Zamansky at or by email at [email protected], for an evaluation of whether you were the victim of possible securities fraud and what your compensation options via FINRA arbitration may be.