On January 28, 2021, Robinhood and several other brokerages abruptly restricted trading in GameStop, AMC, and other heavily shorted stocks, citing clearinghouse deposit requirements and extreme volatility. Retail investors found themselves unable to buy and faced strict position-closing-only (PCO) trading restrictions.

Many brokers touted Easterly ROCMuni for its yield without explaining that the higher income stemmed from speculative holdings and borrowed money. Others failed to mention ongoing 12b-1 fees or distribution charges that eroded returns. Those omissions strike directly at the heart of the Disclosure and Care Obligations under Reg BI.

According to its prospectus, the Easterly ROCMuni High Income Municipal Bond Fund’s primary investment objective was to provide income exempt from federal taxes, and its secondary objective was total return. Investors associate municipal bond funds with safety and stability. The fine print told a different story.

As of October 2025, investors have secured eleven separate FINRA arbitration awards tied to GWG L Bonds. Recoveries range from small individual claims to awards exceeding $1 million.

Even though GWG filed for bankruptcy, given the trustee’s projection that bondholders may recover only 2–3% of principal invested, investors can still pursue claims against the brokerage firms that sold the bonds. Panels have awarded compensatory damages, interest, and costs in multiple cases, underscoring arbitration as a viable path to recovery.

This case shows that even in smaller claims, arbitration panels may hold individual advisors liable for unsuitable GWG sales. It also illustrates that statutory interest can increase an investor’s recovery, even when the principal damages are modest.

Awards like this show that brokerage firms and individual advisors can be held liable for unsuitable sales of GWG L Bonds. Investors are recovering damages, costs, and attorneys’ fees through arbitration.

Awards like this show that brokerage firms can be held liable for their unsuitable sales of GWG L Bonds. Arbitration panels continue to hear claims and issue awards for investors who suffered losses.  

This case is notable because the panel awarded emotional distress damages in addition to compensatory losses, an uncommon outcome in FINRA arbitration. It also shows how state Blue Sky and consumer-protection laws can support attorneys’ fees awards alongside damages.