Alternative asset firm GWG Holdings, Inc., filed for bankruptcy protection under Chapter 11 on the 20th of April, 2022, leaving a large number of investors in GWG L Bonds with gaping holes in their portfolios. This announcement comes even as GWG Holdings has been courting trouble for some time. It has failed to submit required annual regulatory filings on time and owed investors $13.6 million towards principal repayments as well as interest. Since 2020, it has also been under the Security and Exchange Commission’s scanner.
Haselkorn & Thibaut, a national investment fraud law firm, has opened a fraud investigation into the sales of GWG L Bonds by financial advisors and their broker-dealers. Emerson Equity, Centaurus Financial, Cabot Lodge Securities, Aegis Capital, Center Street Securities, International Assets Advisory, NI Advisors, Arete Wealth Management, Western International Securities, and M Stevens Securities.
Investors can call 1-888-614-9356 for a fast and free consultation with a REAL investment fraud lawyer that will clarify how GWG’s bankruptcy action impacts their individual investment loss recovery options including securities fraud lawsuits, class actions, or potential FINRA claims.
GWG L Bonds
Many investors in GWG L bonds are now facing substantial losses as the company navigates bankruptcy and class-action lawsuits. These bonds offered high interest dividends but were poorly secured, unlisted, and auto-renewed, making them unsellable once purchased. Investors should be aware of these risks before purchasing GWG L bonds. Here is a quick guide to GWG L bonds. Hopefully this article has provided you with some valuable information about this type of bond.
L Bonds of GWG are inherently unsuitable for unsophisticated retail investors on account of being illiquid, speculative, and risky. It also appears that misrepresentations and omissions regarding the risk were strategies adopted by some brokers in order to push sales.
SEC initiating, in December 2021, the process of subpoenaing broker-dealers who had been selling these bonds or had signed up to sell has been a contributor to the low sales volume as many of these network partners shied away from it on seeing SEC’s interest. This has been an explanation offered by GWG who has also gone on to say that their firm’s collapse was a result of the probe by SEC. Their liquidity issues emanated from the suspension of L Bond sales in April 2021, which had become necessary in order to address the issues raised by the regulator.
Total sales of GWG L Bonds amounted to $1.6 billion. InvestmentNews has quoted an anonymous investor as wondering if even 30% of the investment value could be realized now that GWG has unraveled.
The managing broker for these bonds was Emerson Equity, LLC. Bonds were sold directly as well as through a network of about 145 brokerage firms appointed for the purpose. Commission earnings on sales was high, which is believed to be one of the reasons many brokerage firms pulled out all stops in pushing sales to retail customers, including seniors and retirees, disregarding prudence and regulations.
Investment Loss Recovery For GWG L Bonds
Haselkorn & Thibaut (InvestmentFraudLawyers.com) has a successful history of supporting investors in junk bonds to file claims and recovery of losses, against some of the biggest firms on Wall Street. Our skilled high-yield bond attorneys are investigating many firms that were believed to be actively involved in the sales of these bonds.
The list includes, but is not limited to Emerson Equity, Centaurus Financial, Cabot Lodge Securities, Aegis Capital, Center Street Securities, International Assets Advisory, NI Advisors, Arete Wealth Management, Western International Securities, and M Stevens Securities. They have further ramped up their efforts in view of the bankruptcy developments.
Financial Industry Regulatory Authority (FINRA) arbitration claims have already been filed against Center Street Securities and NI Advisors on behalf of L bond investors.
If you are an L Bond investor and have suffered a loss, we encourage you to contact our experienced lawyers to you understand your options for a free private consultation at 1-800-856-3352.