An investor has filed a lawsuit against his former broker, alleging that he recommended a life insurance program that caused a devastating financial impact.
The suit, detailed in a report by Think Advisor, was filed in U.S. District Court in Oregon by Oregon resident Scott Alldridge and his Alldridge Family Holdings LLC. It accuses the ex-broker, Joshua L. Gottlieb, of breach of fiduciary duty, negligent misrepresentation, negligence, and unjust enrichment in connection with the marketing, sale, and management of a defective premium-financed indexed universal life insurance plan.
The case dates back to 2015, when Gottlieb sold Alldridge the plan promising $250,000 in annual retirement income and over $10 million in death benefits. Alldridge, trusting Gottlieb’s expertise, invested over $820,000 and borrowed nearly $2 million for premium financing over several years. Gottlieb had assured Alldridge that he would not be required to invest any monies beyond $50,000 per year. Gottlieb allegedly claimed that he and his firms would find the lender and secure loans to finance the premiums, ensure the premiums were paid on time and actively manage the policy to make sure the strategy was working as promised.
In the lawsuit Alldridge contends that Gottlieb and two firms he leads, The Gottlieb Organization and Management Solutions LLC, were in dire financial straits and in desperate need of the commissions from the policy.
Alldridge alleged that from 2015 into 2024, the defendants “repeatedly and unequivocally advised Plaintiffs that premium financing was being secured, premiums were being paid, their investment plan was “working,” and there was absolutely no reason for concern. As Plaintiffs learned in late 2023, however, Defendants failed to arrange for or make the annual premium payments on several occasions, depleting the cash value of the policy, and causing a default of collateral requirements with the premium lending bank.”
As a result, the lending bank foreclosed on the policy and surrendered it, unbeknownst to Alldridge. The policy was surrendered to the bank and the cash value was used to pay off the loan used to secure the financing for the premium.
Alldridge said he lost over $1.2 million he paid into the program and missed an opportunity to invest in a record-breaking market. “The financial consequences of (Gottlieb’s and the firms’) unlawful acts and omissions have been nothing short of devastating,” the suit contends.
It adds that the money Alldridge paid into the policy, along with $456,000 he contributed in June 2023 based on the recommendation to further secure the plan, is gone. Alldridge added that he is now 56 years old and has been diagnosed with Type II diabetes, making it impossible to obtain any other life insurance similar to that originally recommended by Gottlieb.
Gottlieb and a representative from his firm did not immediately respond to an email seeking comment. A call made to The Gottlieb Organization was answered by a voice mail system.
Gottlieb was barred by the Financial Industry Regulatory Authority in 2017 over findings that he did not respond to an information request. FINRA was examining outside business activities that Gottlieb had disclosed to his member firm to determine whether he had participated in private securities transactions that violated rules.
Hyman Cotter PC routinely represents investors harmed when financial professionals and their firms engaged in misconduct that caused their clients investment losses. If you think your financial professional or firm engaged in misconduct that caused investment losses, contact the Chicago investor fraud attorneys of Hyman Cotter PC to schedule a free consultation by calling 312-291-4600 or through our online contact form.
