Robert M. Vance
U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 26139 / September 27, 2024
Securities and Exchange Commission v. Robert M. Vance, Civil Action No. 1:24-cv-01150-BAM (E.D. Cal. filed Sept. 27, 2024)
SEC Charges Broker with Violating Regulation Best Interest
The Securities and Exchange Commission charged California resident Robert Vance - a former registered representative of a broker-dealer - with failing to comply with Regulation Best Interest's Care Obligation when recommending high-risk debt securities known as L Bonds to his retail brokerage customers.
According to the SEC's complaint, between June 2020 and January 2022, Vance recommended that certain of his retail customers, many of whom were at or near retirement age and had moderate risk tolerances, purchase L Bonds despite disclosures by the issuer, GWG Holdings, Inc., that the L Bonds involved a high degree of risk, may be considered speculative, and were only suitable for investors with substantial financial resources and no need for liquidity. The complaint also alleges that Vance continued to recommend that certain retail customers purchase L Bonds even after GWG disclosed in November 2021 that there was substantial doubt about the company's ability to continue as a going concern. The complaint further alleges that Vance failed to exercise reasonable diligence, care, and skill to understand the potential risks, rewards, and costs associated with L Bonds and also recommended the purchase of L Bonds to at least four retail customers for whom he did not have a reasonable basis to believe the recommendations were in the customers' best interest. The SEC's complaint, filed in the U.S. District Court for the Eastern District of California, charges Vance with violations of Rule 15l-1(a)(1) of the Securities Exchange Act of 1934.
The SEC's investigation was conducted by Jedediah Forkner and Jonathon Grobelski and was supervised by Anne C. McKinley of the SEC's Chicago Regional Office. The litigation will be led by Ariella Guardi.