SEC Files Complaint Against Garrett Moretz Over GWG L-Bonds

We recently blogged about broker Garrett Moretz (CRD# 4086791) after the SEC began its investigation into his sales of the now-defunct L-Bonds by GWG Holdings. Following this investigation, the SEC filed a complaint in Federal Court in Charlotte, NC (Securities and Exchange Commission v. Garrett W. Moretz). In its complaint the SEC charged Moretz with fraud in relation to the sales of L-Bonds to retail customers.

The SEC alleges that Moretz continually misrepresented L-Bonds, claiming that they were “guaranteed” beginning about September of 2019 through August of 2020. Moretz knew that these L-Bonds were not guaranteed but represented them that way anyway. He repeatedly sold them as “guaranteed” in both emails and oral communications since at least 2017, according to the complaint.

In a phone conversation with one client, Moretz informed one client that L-Bonds would offer her a much better rate of return than some of her other investments. He also stated that L-Bonds were “100% safe” and “100% guaranteed,” and that her money would be returned. She would receive both principal and interest, and that L-Bonds carried no risk.

In its complaint, the SEC alleges that Moretz knew that the bonds were in no way “guaranteed” when he spoke to his clients about them. Moretz also knew that the L-Bonds had no liquidity, which was detailed in the prospectus. He also knew that anyone buying them could lose their entire investment, and that there was no guarantee that any investment funds would be returned.

Both FINRA and Lifemark, the broker-dealer, have rules regarding guarantees and exaggerated claims. Moretz knew that “guaranteeing” these investments was not correct but did so anyway.

The SEC is requesting disgorgement of “unjust enrichment” Moretz received because of this misconduct, along with prejudgment interest.

New Customer Dispute

In addition to the SEC’s charges, Moretz is also the subject of another customer dispute, filed on 4/29/2024. The customer alleges losses from a REIT (real estate investment trust), an alternative investment intended to be a “smaller component of a larger investment portfolio.”

The issuing company has since declared Chapter 11 bankruptcy, and the client alleges that Moretz failed to notify them when the illiquid REIT went public and suffered a loss. The dispute includes allegations of breach of fiduciary duty, negligence, breach of contract, and misrepresentation.

The client is requesting damages of $50,000, and the claim is currently pending.

Did You Invest With Garrett Moretz?

Silver Law Group represents investors in securities and investment fraud cases. Our lawyers are admitted to practice in New York and Florida and represent investors nationwide to help recover investment losses due to stockbroker misconduct. If you have any questions about how your account has been handled, call to speak with an experienced securities attorney. Most cases are handled on a contingent fee basis, meaning that you won’t owe us until we recover your money for you. Contact us today at (800) 975-4345 and let us know how we can help.