Recover GWG L Bond Investment Losses Following GWG Bankruptcy
GWG Holdings, Inc. (NASDAQ: GWGH), which is a Dallas, Texas financial services firm known for selling “L bonds[,]” filed Chapter 11 bankruptcy (“the GWG Bankruptcy”) in April 2022. National investment fraud lawyers KlaymanToskes is representing clients in claims against full-service brokerage firms that sold GWG’s L Bonds as the distressed company begins to navigate Chapter 11 bankruptcy and manages an ongoing SEC investigation. Many of the L bond investors are retired or elderly individuals.
What is GWG Holdings?
GWG Holdings, through its subsidiary, GWG Life, LLC, owns and manages a portfolio of life insurance policies. GWG created products known as L Bonds, which pooled money from bond investors to purchase life-insurance policies on the secondary market, and then used payouts from the policies when people died to repay the investors. According to its Chapter 11 bankruptcy petition filed in April 2022, GWG describes itself as “as a financial services firm with two principal types of assets: (1) secondary life insurance assets; and (2) economic interests in independent non-affiliated entities that operate in the alternative assets and epigenetics spaces, respectively.”
On April 20, 2022, GWG Holdings, Inc. and its affiliates, GWG Life, LLC and GWG Life USA, LLC, filed Chapter 11 bankruptcy in the Texas Southern Bankruptcy Court. On its bankruptcy petition, GWG Holdings stated that there are between 25,001 and 50,000 creditors, and its liabilities are between $1,000,000,001 and $10,000,000,000. GWG listed its total assets listed was $3,490,196,000 and total debts was $2,063,192,000.
GWG’s bankruptcy follows recent news reporting and company disclosures about the firm’s financial troubles. For instance, on April 4, 2022, the Wall Street Journal reported that GWG previously sought rescue financing that would have enabled it to restructure its balance sheet out of court, but recently shifted to pursuing a loan to finance a chapter 11 proceeding. GWG Holdings bankruptcy follows the company’s recent defaults on interest and principal payments, its disclosure about its inability to file an Annual Report on Form 10-K within the prescribed time-period, and an ongoing SEC investigation.
What is the Size of the GWG Bankruptcy?
Chapter 11 is a form of bankruptcy that involves a reorganization of a debtor’s business affairs, debts, and assets. GWG Holdings has identified over 25,000 individual bond holders, exclusive of the thousands of holders of the debtor’s publicly held common equity and preferred equity. Approximately 10,000 of the Bondholders have a direct subscription with GWGH (“Direct Holders”). Approximately 17,400 of the Bondholders are subscribed through various securities intermediaries, such as The Depository Trust Company (“Indirect Holders”). The average individual Bondholder owns approximate $45,000 worth of Bonds.
Which Brokerage Firms Sold GWG L Bonds?
Several brokerage firms have reportedly sold GWG L bonds, including:
- Emerson Equity
- Cabot Lodge Securities
- Capital Investment Group
- Centaurus Financial
- Coastal Equities
- Ni Advisors
- Landolt Securities
- Lion Street Financial (Stiba Wealth Management)
- National Securities
- SW Financial
The SEC Investigation’s of GWG and its Network of Brokers
in October 2020, the Enforcement Division of the SEC served a subpoena on GWGH in connection with an investigation regarding certain accounting matters and GWGH’s issuance of Bonds. After GWG indicated its intent to restart bond sales, which is believed to be at or around late 2021, the SEC issued subpoenas and document requests to individual Broker Firms that were selling or were considering selling GWGH Bonds. The document requests and subpoenas allegedly related to bond sales practices. According to GWG, Public L Bonds have historically been sold by a seller network most recently comprised of approximately 145 Broker Firms.
Recover GWG L Bonds Investment Losses
KlaymanToskes is a leading national securities law firm practicing exclusively in the field of securities arbitration on behalf of retail and institutional investors throughout the world in large and complex securities matters. KlaymanToskes has recovered more than $230 million for investors in FINRA arbitrations. KlaymanToskes has office locations in California, Florida, New York, and Puerto Rico.
Contact GWG L Bonds Lawyers
Lawrence L. Klayman, Esq. (561) 542-5131