CABOT LODGE SECURITIES & DAVID L ARLEIN

Soreide Law Group, based in Pompano Beach, Florida, has filed a FINRA arbitration on behalf of our client (Claimant) against:

CABOT LODGE SECURITIES LLC (Respondent)

The Claimant in his mid-70s, is retired and living in Texas. The lawsuit alleges the Claimant met broker, DAVID L ARLEIN, sometime on or about 2014 and discussed investments with Arlein that would provide some modest growth but mostly income to set him up through retirement.

On or about 2018, DAVID L ARLEIN, while at CABBOT LODGE recommended the sale of several GWG L bonds, totaling approximately $267,000. DAVID L ARLEIN and Respondent, according to the lawsuit, allegedly failed to warn their customers of the dramatic changes to GWG Holdings that ultimately resulted in its bankruptcy. On April 20^th, 2022, GWG Holdings filed Chapter 11 bankruptcy which will wipe out over 95% of the Claimant’s investment. On December 2021, GWG Holdings failed to make their January 15^th, 2022, interest payment of $10,350,000 and to make their $3,250,000 principal payment on their “L” bonds. The lawsuit alleges that the Respondent chose to ignore this red flag and did not attempt to liquidate any of the Claimant’s GWG bonds.

DAVID LESLIE ARLEIN (DAVID L ARLEIN) was employed with CABOT LODGE in Boca Raton, Florida, from March 2014 through October 2022. David Arlien is no longer registered with any FINRA firm since October 2022. DAVID L ARLEIN is not named in the lawsuit.

The lawsuit alleges CABOT LODGE and their former representative, DAVID L ARLEIN’s actions have caused damages to the Claimant of approximately $267,000.00. The lawsuit alleges negligence, breach of fiduciary duty, and negligent supervision. It is assumed the Respondent will deny all charges.

According to FINRA’s BrokerCheck, available to the public on FINRA’s website, DAVID L ARLEIN was in the securities industry for 50 years and was registered with 18 firms.  Arlein had 27 disclosures on his FINRA CRD report.  Of the 27 disclosures 24 are “Customer Disputes.” The significance of Arlien’s disclosures is underscored in FINRA NOTICE to MEMBERS 03-49. FINRA conducted a review of the CRD’s of all registered representatives, only .41% had been the subject of 3 or more customer complaints. In other words, Arlien’s customer complaints rank him in the top one-hundredth percent of all registered representatives for customer complaints. 

DAVID L ARLEIN’s FINRA CRD report lists the “Customer Disputes,” beginning in 1999, and includes 3 “Regulatory” disclosures filed against Arlein by FINRA.  The complaints list many allegations, these are, in part, just a few: “Claimants alleging breach of fiduciary duty, negligence and negligent misrepresentation, breach of contract, failure to supervise, and negligence - violation of Regulation Best Interest regarding purchases of GWG L Bonds during the year 2020., Claimants alleging breach of fiduciary duty, negligence, negligent supervision, breach of contract, violation of Sections 10(b) and 20(a) of the Securities Exchange Act, and Rule 10b-5 of the Securities, and Exchange Commission, violation of the Florida Securities and Investor Protection Act regarding purchase of GWG., and,  August 2015 to present client alleging negligence and unsuitable transaction.” Of the 24 disputes, 1 was denied, 1 is pending, and 22 have settled with cash settlements.

To discuss this article or any other issues involving GWG L Bond sales, contact the South Florida-based Soreide Law Group and speak to an experienced securities lawyer at no cost:  888-760-6552.

Soreide Law Group represents our clients nationwide before FINRA on a contingency fee basis, no fee to you if no recovery.