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FINRA Fines Kingswood Capital Partners $150,000 for Supervisory Failures in GWG L Bond Sales

Posted on February 17th, 2026 at 3:47 PM
FINRA Fines Kingswood Capital Partners $150,000 for Supervisory Failures in GWG L Bond Sales

From the desk of Jim Eccleston at Eccleston Law

The Financial Industry Regulatory Authority (FINRA) censured and fined San Diego–based broker-dealer Kingswood Capital Partners $150,000 after finding supervisory failures tied to sales of high-risk GWG L bonds. FINRA finalized the settlement through a FINRA Acceptance, Waiver and Consent (AWC) letter, according to AdvisorHub. Kingswood resolved the matter without admitting or denying FINRA’s findings.

According to FINRA, Kingswood failed to reasonably supervise bond sales connected to now-defunct alternative investment manager GWG Holdings. The misconduct involved a single registered representative who sold GWG L bonds to three senior customers in 2019. AdvisorHub reports that Kingswood operates as a subsidiary of the United Kingdom–based Kingswood Group.

According to AdvisorHub, FINRA did not name the broker in the firm-level action. However, FINRA previously suspended former Kingswood broker Phillip C. Anderson for five months and fined him $10,000 in May for similar GWG L bond sales. The allegations in Anderson’s settlement align with those against Kingswood. Anderson sold $96,000 in GWG L bonds to an 81-year-old customer who reported a net worth of $100,000.

FINRA stated that Kingswood ignored clear warning signs that the recommendations were unsuitable based on the customers’ investment profiles. Despite those red flags, the firm approved the transactions without conducting a reasonable supervisory review. In one instance, a Kingswood supervisor flagged a proposed bond purchase but failed to take further action, allowing the transaction to move forward, as reported by AdvisorHub.

FINRA found that Kingswood violated rules requiring firms to maintain a reasonable supervisory system and comply with suitability obligations. Those requirements, which predate Regulation Best Interest, obligated firms and brokers to form a reasonable basis for believing that a recommendation suited the customer.

 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law, finra, kingswood capital

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