A Texas bankruptcy court approved a new financing package for GWG Holdings, which filed for bankruptcy in April 2022 after several months of failing to pay earnings to investors holding L Bonds, an illiquid and risky product unsuitably sold to many investors by approximately 150 regional broker-dealers throughout the United States, even after a 2015 analysis warned against transacting GWG's alternative debt instrument "L Bonds" products.
Although the Wall Street Journal previously estimated that around 27,000 investors in GWG's L Bonds product are still owed $1.3 billion, the bankruptcy court's approved financing package reportedly values GWG's life insurance asset portfolio in the $610 million range, which is about one billion dollars less than the $1.6 billion-worth of L bonds sold to investors prior to GWG's final suspension of L Bond sales.
This means that the likelihood for investors to recover owed money directly from GWG Holdings is less than it was prior to the new financing package's approval, and adds to the importance of considering other avenues of recovery.
The Law Offices of Jonathan W. Evans & Associates is pursuing claims for GWG investors through several of the approximately 150 broker-dealers and investment advisors hat unsuitably recommended and sold the GWG Holdings L Bonds. The bonds were a risky and complex private placement marketed to a wide swath of investors, including retirees, those with a preference for liquidity and low-risk tolerance or a profile of risk aversion—the types of fiscally conservative investors, including many retail clients, elderly investors, and those seeking to save for retirement, who should have never been sold the ill-fated L bonds.
Although Emerson Equity of San Mateo, California remains the firm most commonly associated with unsuitable GWG L Bond sales, we have already seen FINRA and the SEC discipline other firms and their brokers for violating various industry rules and best practices by selling a clearly unsuitable product.
For example, the SEC in June 2022 charged Western International Securities for its role in unsuitably recommending and selling $13.3 million of excessively risky and complex L Bonds to senior citizens and other clients. The SEC also investigated IFP Securities for its purportedly deliberate strategy in seeking risky products, including GWG Holdings L Bonds.
Other firm names that have surfaced in connection with unsuitable GWG L Bond sales include Allied Beacon Partners, Arete Wealth Management, Barouti Financial, Centaurus Financial, Center Street Securities, Moloney Securities, Newbridge Securities, and Strategic Financial Partners.
GWG Holdings' own SEC filings even mentioned "Wells Fargo" as an associated entity.
If you invested with any FINRA-member broker-dealer, representative, or investment adviser who unsuitably recommended and sold you GWG Holdings L Bonds and have suffered losses as GWG suspended payments before filing for bankruptcy, call an experienced FINRA arbitration attorney at The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.