Financial Advisor John Schlagheck has been the Subject of Multiple Customer Disputes Involving GWG Holdings

• November 22, 2024
• Intervest International Equities

John Francis Schlagheck (CRD#: 1040673) was a previously registered broker.

Broker’s History

He entered the securities industry in 1982 and previously worked with IDS Financial Services Inc.; American Express Financial Advisors Inc.; North American Financial Group, Inc.; Linsco/Private Ledger Corp.; FSC Securities Corporation; Multi-financial Securities Corporation; Locus Street Securities, Inc.; Vestax Securities Corporation; IFG Network Securities, Inc.; Primevest Financial Services, Inc.; Washington Square Securities, Inc.; Guaranty Brokerage Services, Inc.; Granite Investment Services, Inc.; Bancwest Investment Services, Inc.; Sammons Securities Company, LLC; Southeast Investments, N.C., Inc.; Intervest International Equities Corporation; and Cape Securities, Inc.

Current and Past Allegations of Conduct Leading to Investment Loss

According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in October of 2024, John Schlagheck became the subject of a customer dispute alleging, “ violations of improper conduct, breach of fiduciary duties, negligence, breach of contract, Negligent supervision, and violation of applicable law industry rules.” The damage amount requested is $258,205.00 and the customer dispute is still pending.

In addition, John Schlagheck has been the subject of twelve other FINRA disclosures which include:

• October 2024—“Claimant alleges violations of improper conduct, breach of fiduciary duties, negligence, breach of contract, Negligent supervision, and violation of applicable law industry rules.” The damage amount requested is $209,267.00 and the customer dispute is still pending.
• October 2024—“Claimant alleges violations of improper conduct, breach of fiduciary duties, negligence, breach of contract, Negligent supervision, and violation of applicable laws and industry rules.” The damage amount requested is $1,107,868.99 and the customer dispute is still pending.
• April 2024—“Claimant alleges violations of law, breach of fiduciary duties and negligence, breach of contract, failure to supervise, omissions, unsuitable investments and Breach of Securities rules and regulations.” The customer dispute settled for $27,500.00
• March 2024—“Claimant alleges violations of law, breach of fiduciary duties and negligence, breach of contract, failure to supervise, omissions, unsuitable investments and Breach of Securities rules and regulations.” The customer dispute settled for $107,500.00/
• March 2024—“Claimant [REDACTED] alleges violations of federal & State securities laws, breach of fiduciary duties and negligence, breach of contract, common law fraud, failure to supervise, misrepresentation and omissions, unsuitable investments and failure to act in the best interest of the client.” The Claimant was awarded $122,401.77.
• August 2024—“Claimant alleges violations of state and federal securities acts, breach of fiduciary duties and negligence, common law fraud and breach of contract.” The customer dispute settled for $22,548.20.
• June 2022—“John F. Schlagheck was named in a customer complaint that asserted the following causes of action: violations of federal securities laws; breach of contract; common law fraud; breach of fiduciary duty; and negligence and gross negligence; and violations of Michigan Uniform Securities Act and violation of Michigan Consumer Protection Act.” The Claimant was awarded $110,044.13.
• June 2022—“Client claims negligence, breach of fiduciary duty, breach of contract, violation of Michigan securities law, and unjust enrichment with the sale of GWG L-Bonds that were sold to the claimant in March of 2021.” The customer dispute settled for $15,000.00.
• September 2015—“Tax Judgment/Lien $26,142.00.”
• March 2010—“Civil Judgment/Lien $78,045.00.”
• April 1991—“Assault/Battery Misdemeanor.”

For a copy of John Schlagheck’s FINRA BrokerCheck, click here.

Wolper Law Firm Is Investigating GWG Holdings Claims

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.

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.