If you invested in GWG Holdings L Bonds and suffered significant losses after the company’s 2022 bankruptcy filing, you may have legal options to recover your losses through a GWG lawsuit. Thousands of retail investors—many of them retirees who relied on the promised income from these bonds—have seen their investments become nearly worthless, with suspended interest payments, halted redemptions, and illiquid positions.

Haselkorn & Thibaut, P.A., a national securities law firm specializing in investor protection, is actively investigating GWG lawsuit claims on behalf of investors who purchased GWG L Bonds through brokerage firms and financial advisors. This comprehensive guide explains what a GWG lawsuit involves, who may have claims, the legal basis for recovery, and the steps investors should take to protect their rights.

Key Takeaways

Table of Contents

A GWG lawsuit typically involves claims against the broker-dealers and financial advisors who recommended GWG L Bonds, not just the issuer itself.
Legal claims often center on unsuitable recommendations, inadequate risk disclosures, over-concentration, and supervisory failures.
Multiple GWG lawsuit proceedings are ongoing, including bondholder litigation related to the bankruptcy and individual investor arbitration claims.
Investors have limited time to file GWG lawsuit claims due to FINRA eligibility rules and statutes of limitations.
Recovery may be possible even though GWG Holdings filed for bankruptcy, as claims target the selling firms’ conduct.

Understanding the GWG Lawsuit Landscape

The term “GWG lawsuit” encompasses several types of legal proceedings related to GWG Holdings and its L Bonds. Understanding the different categories of GWG lawsuit claims is important for investors seeking to recover their losses.

Types of GWG Lawsuit Claims

1. Individual Investor Claims Against Broker-Dealers
The most common type of GWG lawsuit involves individual investors pursuing claims against the brokerage firms and financial advisors who recommended and sold GWG L Bonds. These claims typically proceed through FINRA arbitration and focus on whether the recommendation complied with securities laws and industry regulations.

2. Bondholder Litigation Related to Bankruptcy
Separate from individual investor claims, there are ongoing GWG lawsuit proceedings involving bondholders and parties connected to the GWG Holdings bankruptcy case. Public court records in the Southern District of Texas reflect adversarial motions practice and filings related to the bankruptcy proceedings, case administration, and mediation issues.

3. Class Action Considerations
Some investors have explored whether class action procedures might be available for GWG lawsuit claims. The viability of class actions depends on various factors, including commonality of claims, predominance of common issues, and procedural requirements.

4. Regulatory Proceedings
Beyond private GWG lawsuit claims, regulatory authorities including FINRA and the SEC have conducted examinations and enforcement actions related to firms that sold GWG L Bonds.

What Went Wrong: The GWG Holdings Collapse

To understand the basis for GWG lawsuit claims, it’s important to understand what happened with GWG Holdings and why so many investors suffered losses.

The GWG Business Model

GWG Holdings operated in the life settlement industry, purchasing life insurance policies in the secondary market at a discount and holding them until maturity. The company financed these purchases in part by issuing L Bonds to retail investors through independent broker-dealers.

The business model carried inherent risks:

Valuation Uncertainty: Determining the fair value of life insurance policies involves complex actuarial assumptions and can be subjective.
Liquidity Challenges: The underlying assets (life insurance policies) are illiquid and cannot be quickly converted to cash.
Regulatory Complexity: The life settlement industry faces regulatory scrutiny at both state and federal levels.
Operational Risks: The business required ongoing capital to maintain insurance premiums and operations.

Warning Signs Before the Collapse

Before GWG Holdings filed for bankruptcy in April 2022, several warning signs emerged:

Delayed Financial Reporting: GWG experienced delays in filing financial statements, raising questions about internal controls and financial condition.
Accounting Issues: The company faced questions about its accounting practices and asset valuations.
Liquidity Pressures: GWG encountered challenges meeting redemption requests and maintaining adequate liquidity.
Regulatory Scrutiny: The company disclosed regulatory inquiries and investigations.
Credit Rating Actions: Credit rating agencies took negative actions on GWG’s debt.

Many investors in GWG lawsuit cases report that their brokers did not inform them of these warning signs or explain their significance.

The April 2022 Bankruptcy Filing

When GWG Holdings filed for Chapter 11 bankruptcy protection, the consequences for L Bond investors were immediate and severe:

Interest Payment Suspensions: The company stopped making interest payments, cutting off the income stream investors relied upon.
Redemption Halts: All redemptions were suspended, leaving investors with no way to access their principal.
Value Decline: The market value of L Bonds plummeted, with investors facing losses of 90% or more.
Wind-Down Trust: Through the bankruptcy process, many L Bond investors received interests in a wind-down trust that have retained minimal value.

Legal Basis for GWG Lawsuit Claims Against Broker-Dealers

GWG lawsuit claims against broker-dealers and financial advisors are based on violations of securities laws, FINRA rules, and common law duties. Understanding these legal foundations is important for evaluating potential claims.

Suitability Violations: The Core of Many GWG Lawsuit Claims

Suitability is one of the most fundamental obligations in the securities industry and forms the basis for many GWG lawsuit claims. FINRA Rule 2111 requires broker-dealers to have a reasonable basis to believe that a recommended transaction or investment strategy is suitable for the customer.

Three Components of Suitability:

Reasonable-Basis Suitability: The broker must understand the investment and have a reasonable basis to believe it could be suitable for at least some investors.
Customer-Specific Suitability: The broker must have a reasonable basis to believe the investment is suitable for the particular customer based on that customer’s investment profile.
Quantitative Suitability: The broker must have a reasonable basis to believe that a series of recommended transactions is not excessive.

GWG Lawsuit Suitability Issues:

Many GWG lawsuit claims involve allegations that GWG L Bonds were unsuitable for the investors who purchased them:

Elderly Investors: GWG L Bonds were frequently sold to elderly investors who had limited time horizons, needed liquidity for potential healthcare costs, and could not afford to lose principal. The illiquid, high-risk nature of L Bonds made them unsuitable for many elderly investors.
Conservative Risk Tolerance: Investors who specifically stated they wanted conservative, safe investments were sold speculative, high-risk L Bonds. GWG lawsuit claims often involve investors whose account documents indicated conservative or moderate risk tolerance.
Income Dependency: Retirees who relied on investment income for living expenses were sold L Bonds without adequate explanation that the interest payments could be suspended at any time, leaving them without their expected income.
Liquidity Needs: Investors who indicated they might need access to their funds were sold illiquid investments that could not be readily liquidated. GWG’s redemption policies included significant restrictions, and redemptions could be suspended entirely.
Capital Preservation Objectives: Investors whose primary objective was preserving capital were sold investments that carried substantial risk of principal loss, which ultimately materialized when GWG filed for bankruptcy.

Failure to Disclose Material Risks

Even if an investment might be suitable for some investors, broker-dealers have an obligation to provide balanced, accurate information about both potential benefits and material risks. Many GWG lawsuit claims involve allegations that brokers failed to adequately disclose the risks of L Bonds.

Key Disclosure Failures in GWG Lawsuit Cases:

Liquidity Risk: Many investors report they were not clearly informed that GWG L Bonds were illiquid, could not be sold on a secondary market, and that redemptions were subject to company policies and could be suspended.
Credit Risk: Investors often were not adequately warned that L Bonds were unsecured debt obligations dependent entirely on GWG’s financial health, and that they could lose their entire principal if GWG encountered financial difficulties.
Business Model Risks: The complex nature of GWG’s life settlement business model and the associated valuation, regulatory, and operational risks were often not clearly explained to retail investors.
Issuer Financial Condition: As warning signs emerged about GWG’s financial condition, many brokers did not inform their clients or explain the significance of delayed financial reporting, accounting issues, or regulatory scrutiny.
Redemption Restrictions: The specific terms and limitations of GWG’s redemption policies were often not clearly explained, leaving investors with unrealistic expectations about their ability to access their money.
Fee Structures: GWG L Bonds involved substantial commissions paid to broker-dealers and representatives, creating conflicts of interest that may not have been adequately disclosed.

Over-Concentration and Diversification Failures

Proper portfolio diversification is a fundamental principle of investment management and a key consideration in GWG lawsuit claims. Concentrating too much of a portfolio in a single investment or single issuer exposes investors to excessive risk.

Concentration Issues in GWG Lawsuit Cases:

Single-Issuer Concentration: Many investors had substantial portions of their portfolios allocated to GWG L Bonds, creating dangerous concentration in a single issuer. When GWG filed for bankruptcy, these investors faced catastrophic losses.
Multiple Tranches: Some investors purchased multiple series or tranches of GWG L Bonds over time, compounding their concentration in a single issuer without adequate consideration of the cumulative risk.
Alternative Investment Concentration: Beyond GWG specifically, some investors’ portfolios were heavily weighted toward illiquid alternative investments generally, violating diversification principles and creating excessive risk.
Lack of Offsetting Positions: Portfolios concentrated in GWG L Bonds often lacked sufficient liquid, conservative holdings to offset the risks of the alternative investments.

Negligent Supervision and Due Diligence Failures

Brokerage firms have supervisory obligations that extend beyond individual broker conduct. Many GWG lawsuit claims include allegations that firms failed to adequately supervise their representatives or conduct proper due diligence on GWG L Bonds.

Supervisory Failures in GWG Lawsuit Cases:

Inadequate Product Due Diligence: Firms may have failed to conduct reasonable due diligence on GWG Holdings before offering L Bonds to clients, including investigating the company’s financial condition, business model, management, and regulatory status.
Failure to Monitor Warning Signs: As red flags emerged about GWG’s financial health, firms may have failed to reassess the appropriateness of continuing to offer L Bonds or to inform existing investors of the developing concerns.
Insufficient Representative Training: Firms may not have provided adequate training to representatives about L Bonds’ features, risks, and suitability considerations, leading to unsuitable recommendations.
Inadequate Sales Practice Oversight: Firms may have lacked adequate systems to review and approve alternative investment sales, monitor for concentration issues, or identify patterns of unsuitable recommendations.
Compensation Incentives: The high commissions associated with L Bonds created incentives for representatives to recommend them even when unsuitable, and firms may have failed to adequately supervise to prevent commission-driven recommendations.

Breach of Fiduciary Duty

In some circumstances, financial advisors owe fiduciary duties to their clients, requiring them to act in the client’s best interest. GWG lawsuit claims may include breach of fiduciary duty allegations where applicable, such as when advisors held themselves out as providing comprehensive financial planning or had discretionary authority over accounts.

Who Can File a GWG Lawsuit?

Not every investor who lost money in GWG L Bonds will have viable GWG lawsuit claims, but many do. Understanding eligibility is an important first step.

Factors That Support GWG Lawsuit Claims

Strong GWG lawsuit claims typically involve:

Broker Recommendation: The investment was recommended by a broker or financial advisor, not a self-directed purchase. Claims focus on the recommendation process and whether it complied with industry standards.
Suitability Mismatch: There was a clear mismatch between the investment’s characteristics (high-risk, illiquid, complex) and the investor’s profile (elderly, conservative, income-dependent, liquidity needs).
Inadequate Disclosure: The investor was not provided with clear, balanced information about the material risks of GWG L Bonds, or risk disclosures were buried in fine print without adequate explanation.
Concentration: GWG L Bonds represented a substantial portion of the investor’s portfolio, creating excessive concentration risk.
Reliance: The investor relied on the broker’s recommendation and expertise in making the investment decision.
Damages: The investor suffered quantifiable financial losses as a result of the investment.
Timely Action: The investor is acting within applicable time limitations (FINRA’s six-year eligibility rule and relevant statutes of limitations).

Common Investor Profiles in GWG Lawsuit Cases

Retirees Seeking Income:
Many GWG lawsuit claims involve retirees who were seeking stable income to supplement Social Security or pension payments. These investors were attracted by the high interest rates offered by L Bonds but were not adequately informed about the risks or the possibility that payments could be suspended.

Conservative Investors:
Investors who specifically stated they wanted safe, conservative investments but were sold high-risk, speculative L Bonds often have strong GWG lawsuit claims based on suitability violations.

Elderly Investors with Limited Time Horizons:
Elderly investors who had limited time horizons and potential needs for liquidity were often unsuitable candidates for illiquid, long-term alternative investments like GWG L Bonds.

Investors with Liquidity Needs:
Investors who indicated they might need access to their funds for emergencies, healthcare costs, or planned expenses were often unsuitable candidates for investments that could not be readily liquidated.

Unsophisticated Investors:
Investors who lacked experience with complex alternative investments and relied heavily on their broker’s guidance often have strong GWG lawsuit claims when those brokers failed to adequately explain the risks.

GWG Lawsuit Process: FINRA Arbitration vs. Court Litigation

GWG lawsuit claims can proceed through different forums, each with distinct characteristics, advantages, and procedures.

FINRA Arbitration: The Primary Forum for GWG Lawsuit Claims

The vast majority of GWG lawsuit claims against broker-dealers proceed through FINRA arbitration rather than court litigation. Understanding the FINRA arbitration process is essential for investors considering claims.

Why FINRA Arbitration?

Most brokerage account agreements include mandatory arbitration clauses requiring disputes to be resolved through FINRA arbitration rather than court litigation. Even when arbitration is not mandatory, it often offers advantages for securities disputes.

FINRA Arbitration Process for GWG Lawsuit Claims:

Filing the Statement of Claim (Month 1):
The investor (claimant) files a Statement of Claim with FINRA, outlining the factual allegations, legal claims, and damages sought. The filing fee varies based on the amount claimed.
Respondent’s Answer (Months 2-3):
The brokerage firm (respondent) files an Answer responding to the allegations, typically denying liability and asserting various defenses.
Arbitrator Selection (Months 3-4):
The parties select arbitrators from FINRA’s roster. Cases involving claims under $100,000 typically have one arbitrator; larger cases have three arbitrators. The panel usually includes a mix of public arbitrators and industry arbitrators.
Initial Prehearing Conference (Month 4-5):
The arbitrators hold a conference to establish a schedule for discovery, motion practice, and the hearing.
Discovery (Months 5-10):
The parties exchange documents and information relevant to the claims. Discovery in arbitration is more streamlined than in court litigation, focusing on the most relevant evidence. This phase typically includes:
- Document production (account records, communications, firm policies, etc.)
- Depositions of key witnesses (typically limited in number)
- Expert witness disclosures and reports
Motion Practice (Months 8-12):
Parties may file motions, such as motions to dismiss or motions for summary judgment, though these are less common in arbitration than in court.
Hearing (Months 12-18):
The arbitration hearing is similar to a trial but less formal. Both sides present evidence, examine witnesses, and make legal arguments. Hearings typically last 3-10 days depending on case complexity.
Award (Months 13-18):
After the hearing, the arbitration panel deliberates and issues a written award determining liability and damages. The award is binding and enforceable, with very limited grounds for appeal.

Advantages of FINRA Arbitration for GWG Lawsuit Claims:

Industry Expertise: Arbitrators typically include individuals with securities industry knowledge who understand complex products and industry standards.
Efficiency: Arbitration generally proceeds more quickly than court litigation, with streamlined discovery and procedures.
Cost Management: The focused nature of arbitration can help control legal costs compared to extended court litigation.
Confidentiality: Arbitration proceedings are confidential, protecting investor privacy. (Awards become public, but the proceedings themselves are not.)
Finality: Awards are binding and enforceable, with very limited appeal rights, providing closure.
Accessibility: The process is designed to be accessible to individual investors, with procedures that are less formal than court litigation.

Challenges of FINRA Arbitration:

Limited Discovery: The streamlined discovery process, while efficient, may limit the ability to uncover evidence in complex cases.
Limited Appeal Rights: The finality of arbitration awards means there is very limited ability to appeal an unfavorable decision.
Arbitrator Variability: The quality and approach of arbitrators can vary, and parties have limited control over who decides their case.
Industry Arbitrators: The inclusion of industry arbitrators on panels raises concerns for some investors about potential bias, though public arbitrators typically outnumber industry arbitrators.

Court Litigation for GWG Lawsuit Claims

While most GWG lawsuit claims proceed through FINRA arbitration, court litigation may be appropriate in certain circumstances.

When Court Litigation May Be Preferable:

No Arbitration Agreement: If the account agreement does not include a mandatory arbitration clause, court litigation may be an option.
Complex Legal Issues: Cases involving novel legal questions or complex fraud allegations may benefit from the broader discovery rights and procedural protections available in court.
Class Action Potential: If many investors suffered similar harm from similar conduct, class action procedures available in court may provide an efficient resolution mechanism.
Punitive Damages: Some jurisdictions allow punitive damages in court but not in arbitration, making court litigation potentially more attractive in cases involving egregious misconduct.
Public Proceedings: Unlike confidential arbitration, court proceedings are public, which may be important for investors seeking public accountability.

Court Litigation Process:

Court litigation follows more formal procedures than arbitration, including:

Filing a complaint in the appropriate court (federal or state)
Extensive discovery including interrogatories, requests for production, and depositions
Motion practice including motions to dismiss and motions for summary judgment
Potential jury trial (in some cases)
Post-trial motions and potential appeals

Court litigation typically takes longer and costs more than arbitration but provides more procedural protections and broader discovery rights.

Choosing the Right Forum for Your GWG Lawsuit

The appropriate forum for a GWG lawsuit depends on various factors specific to each case:

Whether the account agreement includes a mandatory arbitration clause
The complexity of the legal and factual issues
The amount of damages at stake
Whether multiple investors suffered similar harm
Strategic considerations about arbitrator vs. judge/jury decision-making
Cost and timing considerations

An experienced securities attorney can evaluate these factors and recommend the most appropriate forum for your specific situation.

Calculating Damages in a GWG Lawsuit

Understanding how damages are calculated in a GWG lawsuit is important for setting realistic expectations and evaluating settlement offers.

Components of Damages

1. Out-of-Pocket Losses (Principal Loss)

The most straightforward component of damages is the out-of-pocket loss—the amount invested minus any amounts recovered. However, the calculation is not always simple:

Total Investment: The full amount invested in GWG L Bonds across all purchases.
Distributions Received: Any interest payments received before distributions were suspended. However, these may have been returns of capital rather than investment gains, which affects the calculation.
Current Value: The current value of any wind-down trust interests or other consideration received through the bankruptcy process.
Net Loss: Total investment minus distributions received minus current value equals the out-of-pocket loss.

For many GWG L Bond investors, the out-of-pocket loss represents 80-95% of their original investment.

2. Lost Income (Suspended Interest Payments)

Beyond principal losses, GWG lawsuit damages include the interest payments that were suspended when GWG filed for bankruptcy:

Contractual Interest Rate: L Bonds typically paid interest rates of 7-8.5% annually.
Suspension Period: Interest payments were suspended from April 2022 through the present.
Calculation: The contractual interest rate multiplied by the principal amount multiplied by the suspension period equals lost income.

For an investor who held $100,000 in L Bonds paying 8% interest, the lost income over three years would be approximately $24,000.

3. Opportunity Cost (Lost Investment Returns)

Perhaps the most significant component of damages in many GWG lawsuit cases is opportunity cost—the returns the investor could have earned if their money had been invested in suitable alternatives.

Opportunity Cost Calculation:

Suitable Alternative: Determine what investment would have been suitable for the investor based on their actual risk tolerance, objectives, and time horizon. For conservative investors, this might be a balanced portfolio of stocks and bonds or a conservative allocation fund.
Benchmark Returns: Calculate what the suitable alternative would have returned during the relevant period.
Comparison: The difference between what the investor actually received (significant losses) and what they would have received in a suitable alternative represents opportunity cost damages.

Example:

Investor purchased $100,000 in GWG L Bonds in 2019
Investor’s profile indicated conservative risk tolerance and capital preservation objective
Suitable alternative: 60% stock / 40% bond balanced portfolio
Balanced portfolio returned approximately 8% annually from 2019-2024
Investor would have had approximately $146,000 if invested suitably
Investor actually has approximately $5,000 in wind-down trust interests
Opportunity cost damages: approximately $141,000

Opportunity cost often represents the largest component of damages because it captures not just what the investor lost, but what they failed to gain by having their money tied up in an unsuitable investment.

4. Consequential Damages

In some cases, investors may be entitled to consequential damages—additional losses that resulted from the unsuitable investment:

Forced Liquidations: If the investor had to liquidate other investments at unfavorable times to meet living expenses after GWG suspended interest payments.
Debt Incurred: If the investor had to incur debt (credit cards, home equity loans, etc.) to meet expenses they would have covered with GWG interest payments.
Tax Consequences: Adverse tax consequences resulting from the investment or its liquidation.
Emotional Distress: In some jurisdictions and circumstances, damages for emotional distress may be available, though these are less common in securities cases.

Consequential damages require clear documentation of the causal connection between the unsuitable investment and the additional losses.

5. Interest on Damages

Many jurisdictions allow prejudgment interest on damages, compensating the investor for the time value of money from when the loss occurred until judgment or award. Interest rates and calculation methods vary by jurisdiction and forum.

6. Costs and Attorney’s Fees

In some circumstances, prevailing investors may recover their costs and attorney’s fees. FINRA arbitration panels have discretion to award costs and fees. The availability and amount of fee awards depend on various factors including the outcome, the parties’ conduct, and applicable law.

Defenses and Offsets

Brokerage firms defending GWG lawsuit claims typically assert various defenses that can affect damages calculations:

Comparative Fault:
Firms may argue that the investor bears some responsibility for the losses, such as by failing to read disclosure documents or ignoring warnings. If successful, this defense can reduce damages proportionally.

Mitigation:
Firms may argue that the investor failed to mitigate damages, such as by not diversifying after learning of problems or not taking advantage of redemption opportunities before they were suspended.

Offsetting Gains:
Firms may argue that gains in other investments should offset losses in GWG L Bonds, though this defense is often unsuccessful when the unsuitable investment was a significant portion of the portfolio.

Disclosure Defense:
Firms typically argue that all material risks were disclosed in offering documents, even if those disclosures were not adequately explained or the investment was unsuitable regardless of disclosure.

Time Limitations for Filing a GWG Lawsuit

One of the most important considerations for investors considering a GWG lawsuit is timing. Various time limitations can affect the ability to pursue claims.

FINRA’s Six-Year Eligibility Rule

FINRA Rule 12206 provides that claims are generally ineligible for arbitration if six years have elapsed from the occurrence or event giving rise to the claim. This is often called the “six-year rule” and is one of the most important time limitations for GWG lawsuit claims.

Calculating the Six-Year Period:

Determining when the six-year period begins can be complex and depends on the specific facts:

Purchase Date: For some claims, the six-year period runs from the date of purchase.
Last Purchase: If multiple purchases occurred, the period may run from the last purchase.
Discovery: In some circumstances, the period may run from when the investor discovered or should have discovered the wrongdoing.
Continuing Relationship: If the investor maintained an ongoing relationship with the broker, this may affect the calculation.

For GWG L Bonds purchased before April 2016, the six-year eligibility period may have already expired for some claims, making prompt action critical.

State Statutes of Limitations

Beyond FINRA’s eligibility rule, state statutes of limitations apply to various legal claims that might be asserted in a GWG lawsuit:

Fraud Claims: Typically 2-5 years from discovery of the fraud, varying by state.
Negligence Claims: Typically 2-4 years from the occurrence, varying by state.
Breach of Fiduciary Duty: Typically 3-6 years, varying by state.
Breach of Contract: Typically 4-6 years, varying by state.

The applicable statute of limitations depends on the legal theories asserted, the state whose law applies, and when the claim accrued.

Federal Securities Law Limitations Periods

Federal securities law claims have specific limitations periods:

Securities Act of 1933 Claims: Generally must be brought within one year of discovery and three years of the violation.
Securities Exchange Act of 1934 Claims: Generally must be brought within two years of discovery and five years of the violation.

These federal limitations periods may apply to certain GWG lawsuit claims, particularly those involving fraud or misrepresentation.

Why Prompt Action Is Critical

Several factors make prompt action important for potential GWG lawsuit claims:

Approaching Deadlines:
For GWG L Bonds purchased in 2018-2019, the six-year FINRA eligibility period is approaching or may have already passed, making immediate action critical.

Evidence Preservation:
Important evidence can be lost over time:

Firms may purge older documents or change record-keeping systems
Brokers may change jobs, retire, or become difficult to locate
Memories fade, making witness testimony less reliable
Email and other communications may be deleted

Strategic Advantages:
Early cases may achieve better results:

Firms may be more motivated to settle before patterns of liability are established
Settlement leverage may be stronger before firms have invested heavily in defending multiple cases
Arbitrators may not yet have developed views on recurring issues

Investigation Time:
Building a strong GWG lawsuit case requires time for investigation, document review, expert analysis, and case preparation. Starting early ensures adequate time for thorough preparation.

What to Expect: The GWG Lawsuit Process Step-by-Step

Understanding what to expect if you pursue a GWG lawsuit can help you make informed decisions and prepare for the process ahead.

Step 1: Initial Consultation (Week 1)

The process begins with a consultation with a securities attorney to evaluate your potential claims.

What to Prepare:

Account statements showing GWG L Bond purchases and current holdings
Trade confirmations for L Bond purchases
Account opening documents showing your investment objectives and risk tolerance
Any offering documents, prospectuses, or marketing materials you received
Correspondence with your broker about the investment
Information about your financial situation at the time of purchase
Timeline of key events and communications

What to Expect:

Discussion of your investment experience and objectives
Review of how GWG L Bonds were presented to you
Analysis of whether the investment was suitable for your situation
Explanation of the legal process and potential outcomes
Assessment of the strengths and challenges of your case
Discussion of fees and costs (typically contingency fee arrangement)

Step 2: Case Investigation (Weeks 2-8)

If you decide to proceed, the attorney will conduct a thorough investigation of your claims.

Investigation Activities:

Comprehensive document review and analysis
Research into the broker’s and firm’s background and disciplinary history
Investigation of the firm’s due diligence on GWG Holdings
Review of similar cases and outcomes
Consultation with financial experts about suitability and damages
Analysis of applicable law and legal theories
Development of case strategy

Step 3: Demand Letter or Pre-Filing Negotiations (Weeks 6-12)

Before filing formal claims, the attorney may send a demand letter to the brokerage firm outlining the claims and seeking resolution.

Potential Outcomes:

Early Settlement: Some cases resolve through pre-filing negotiations, saving time and costs.
Productive Discussions: Even if early settlement isn’t achieved, pre-filing discussions may narrow issues and facilitate later resolution.
No Response or Rejection: If the firm rejects the demand or doesn’t respond productively, formal claims will be filed.

Step 4: Filing the FINRA Arbitration Claim (Month 3-4)

If pre-filing negotiations don’t resolve the case, the attorney will file a Statement of Claim with FINRA.

Statement of Claim Contents:

Detailed factual allegations about the investment and recommendation
Legal claims (suitability violations, failure to disclose, negligence, etc.)
Damages calculation with supporting detail
Request for relief (compensatory damages, costs, fees, etc.)

Filing Requirements:

Filing fee based on amount claimed (ranging from $50 to $1,800)
Service on the respondent brokerage firm
Selection of hearing location

Step 5: Respondent’s Answer (Month 4-5)

The brokerage firm will file an Answer responding to the allegations.

Typical Answer Contents:

Denial of liability and factual allegations
Affirmative defenses (disclosure, comparative fault, etc.)
Counterclaims (rare but possible)

Step 6: Arbitrator Selection (Month 5-6)

The parties will select arbitrators from FINRA’s roster through a striking process.

Selection Process:

FINRA provides lists of potential arbitrators with background information
Each party strikes (eliminates) arbitrators they don’t want
Remaining arbitrators are appointed to the panel
Typical panel: one chair (often an attorney) and two other arbitrators

Step 7: Initial Prehearing Conference (Month 6-7)

The arbitration panel holds an initial conference to establish procedures and schedule.

Conference Topics:

Discovery schedule and procedures
Motion practice schedule
Hearing date selection
Procedural issues and disputes
Case management orders

Step 8: Discovery (Months 7-12)

The parties exchange documents and information relevant to the claims.

Discovery Activities:

Document requests and production
Interrogatories (written questions)
Depositions of key witnesses (investor, broker, supervisors, experts)
Expert witness disclosures and reports
Subpoenas for third-party documents if needed

Key Documents in GWG Lawsuit Discovery:

Complete account records and statements
Communications between broker and investor
Firm’s due diligence on GWG Holdings
Firm policies and procedures for alternative investments
Broker’s training records
Supervisory reviews of the account
Marketing materials and presentations
Offering documents and disclosures

Step 9: Expert Witness Preparation (Months 10-14)

Most GWG lawsuit cases involve expert witnesses who provide opinions on key issues.

Common Expert Witnesses:

Securities Industry Expert: Testifies about industry standards for suitability, disclosure, and supervision.
Financial Planning Expert: Testifies about suitable alternatives for the investor’s profile.
Damages Expert: Calculates damages including opportunity costs.
Valuation Expert: May testify about GWG Holdings’ financial condition (less common).

Step 10: Settlement Negotiations (Ongoing)

Settlement discussions typically occur throughout the process, with serious negotiations often intensifying as the hearing approaches.

Settlement Considerations:

Strength of liability case
Damages calculation and proof
Costs and risks of proceeding to hearing
Time value of money and certainty of settlement
Emotional toll of continued litigation

Many GWG lawsuit cases settle before hearing, though settlement amounts vary widely based on case-specific factors.

Step 11: Prehearing Preparation (Months 14-16)

If the case doesn’t settle, intensive preparation for the hearing begins.

Preparation Activities:

Witness preparation (investor testimony, expert testimony)
Exhibit preparation and organization
Prehearing briefs and motions
Opening statement preparation
Cross-examination preparation
Demonstrative exhibits and presentations

Step 12: Arbitration Hearing (Months 16-18)

The hearing is similar to a trial but less formal, typically lasting 3-10 days.

Hearing Procedure:

Opening statements by both sides
Claimant’s case-in-chief (investor testimony, expert testimony, documents)
Respondent’s case (firm’s witnesses, expert testimony, documents)
Rebuttal testimony
Closing arguments
Post-hearing briefs (sometimes)

Step 13: Arbitration Award (Months 17-19)

After the hearing, the panel deliberates and issues a written award.

Award Contents:

Determination of liability
Damages awarded (if any)
Allocation of costs and fees
Brief explanation of reasoning (sometimes)

Award Outcomes:

Claimant Victory: Panel awards damages to the investor (full or partial recovery).
Respondent Victory: Panel denies the claims and awards nothing.
Split Decision: Panel finds some liability but awards less than claimed.

Post-Award:

Awards are binding and enforceable
Very limited grounds for appeal or vacatur
Confirmation and enforcement through court if firm doesn’t pay voluntarily

Ongoing GWG Lawsuit Developments: Bankruptcy-Related Litigation

Beyond individual investor claims against broker-dealers, there are ongoing GWG lawsuit proceedings related to the bankruptcy case itself. While these proceedings are distinct from individual investor arbitration claims, they provide important context.

Bondholder Litigation in Federal Court

Public court records reflect continued litigation activity in the Southern District of Texas involving GWG Holdings bondholders and parties connected to the bankruptcy proceedings. Recent filings include adversarial motions practice related to case administration, mediation, and other bankruptcy-related issues.

These proceedings involve complex questions about the bankruptcy process and the conduct of various parties involved in the case. While the outcomes of these proceedings may not directly affect individual investor claims against selling broker-dealers, they contribute to the overall understanding of what happened with GWG Holdings.

Regulatory Developments

Beyond private litigation, regulatory authorities have taken actions related to GWG Holdings and firms that sold L Bonds:

FINRA Examinations: FINRA has conducted examinations of firms that sold GWG L Bonds, reviewing sales practices, supervision, and due diligence.
Enforcement Actions: Some firms and individuals have faced regulatory enforcement actions related to GWG L Bond sales.
Industry Guidance: Regulators have issued guidance about alternative investment sales practices, supervision, and due diligence, informed in part by issues that arose with GWG and similar products.

Implications for Individual Investors

While bankruptcy-related litigation and regulatory developments are separate from individual GWG lawsuit claims against broker-dealers, they can have implications:

Evidence: Developments in bankruptcy proceedings may reveal information relevant to individual investor claims.
Context: Understanding what happened in the bankruptcy provides context for evaluating broker-dealer conduct.
Settlement Leverage: Regulatory actions or adverse bankruptcy developments may affect firms’ willingness to settle individual claims.
Recovery Prospects: Bankruptcy proceedings determine what, if anything, L Bond investors will recover from the GWG estate, which affects the calculation of damages in claims against broker-dealers.

Choosing the Right Attorney for Your GWG Lawsuit

The attorney you choose to represent you in a GWG lawsuit can significantly impact the outcome of your case. Understanding what to look for can help you make an informed decision.

Key Qualifications

Securities Law Experience:
GWG lawsuit cases involve complex securities laws, FINRA rules, and industry standards. Your attorney should have substantial experience specifically in securities arbitration and litigation, not just general litigation experience.

Alternative Investment Experience:
GWG L Bonds are alternative investments with unique characteristics. Your attorney should have experience with similar products and understand the specific issues that arise in alternative investment cases.

FINRA Arbitration Experience:
Since most GWG lawsuit claims proceed through FINRA arbitration, your attorney should have extensive experience in this forum, including knowledge of arbitrator selection, discovery procedures, and hearing presentation.

Track Record:
Look for an attorney or firm with a proven track record of successful results in securities cases, including cases involving alternative investments and suitability claims.

Resources:
GWG lawsuit cases require significant resources for investigation, expert witnesses, and case preparation. Your attorney should have the financial resources and staff to fully prepare your case.

Questions to Ask

When evaluating attorneys for your GWG lawsuit, consider asking:

How many securities arbitration cases have you handled?
How many cases have you handled involving alternative investments like GWG L Bonds?
What is your track record in FINRA arbitration?
How many GWG lawsuit cases are you currently handling?
Who will actually work on my case day-to-day?
What experts do you typically work with?
How do you communicate with clients during the case?
What are your fees and how are costs handled?
What is your assessment of my case’s strengths and challenges?
What is a realistic timeline and range of potential outcomes?

Fee Arrangements

Most securities attorneys handle GWG lawsuit cases on a contingency fee basis:

Contingency Fee Structure:

No attorney’s fees unless there is a recovery
Fees calculated as a percentage of recovery (typically 33-40%)
Firm advances costs of investigation and case preparation
Aligns attorney’s interests with client’s interests
Provides access to representation regardless of current financial situation

Cost Considerations:

Filing fees (paid to FINRA)
Expert witness fees
Deposition costs
Document production costs
Hearing expenses (travel, transcripts, etc.)

Understand how costs are handled—whether the firm advances them or whether you’re responsible, and whether they’re deducted from any recovery before or after calculating the contingency fee.

Haselkorn & Thibaut’s Approach to GWG Lawsuit Cases

Haselkorn & Thibaut brings extensive experience and a comprehensive approach to representing investors in GWG lawsuit claims.

Our Experience

Securities Arbitration Focus:
Our firm focuses exclusively on representing investors in securities arbitration and litigation. This specialization means we have deep knowledge of the laws, rules, and procedures that govern GWG lawsuit cases.

Alternative Investment Experience:
We have handled numerous cases involving alternative investments similar to GWG L Bonds, including:

Private placements and Regulation D offerings
Non-traded REITs and BDCs
Oil and gas partnerships
Structured products and credit-linked notes
Other high-commission, illiquid alternative investments

Track Record:
We have recovered millions of dollars for investors who suffered losses due to unsuitable recommendations, inadequate disclosures, and supervisory failures.

National Practice:
We represent investors nationwide, with experience in FINRA arbitration forums across the country and in federal and state courts in multiple jurisdictions.

Our Process

Thorough Investigation:
We conduct comprehensive investigations of every GWG lawsuit case, including:

Detailed document review and analysis
Investigation of the broker’s and firm’s background
Research into the firm’s due diligence on GWG Holdings
Analysis of similar cases and outcomes
Consultation with industry experts

Expert Witnesses:
We work with highly qualified expert witnesses who can provide compelling testimony on:

Industry standards for suitability and disclosure
Suitable alternative investments for your profile
Damages calculation including opportunity costs
Firm supervisory obligations

Strategic Approach:
We develop case strategies tailored to each client’s specific circumstances, considering:

The strength of liability evidence
Damages calculation and proof
Forum selection (arbitration vs. litigation)
Settlement vs. hearing strategy
Cost-benefit analysis

Client Communication:
We believe in keeping clients informed throughout the process with:

Regular updates on case developments
Clear explanations of procedures and decisions
Prompt responses to questions and concerns
Realistic assessments of case progress and prospects

Our Commitment

Contingency Fee Representation:
We handle GWG lawsuit cases on a contingency fee basis, meaning you pay no attorney’s fees unless we recover money for you. This arrangement:

Eliminates financial barriers to pursuing your claims
Aligns our interests with yours
Demonstrates our confidence in your case

Maximum Recovery:
Our goal is to achieve maximum recovery for every client through:

Thorough case preparation
Aggressive advocacy
Strategic settlement negotiations
Compelling hearing presentations when necessary

Personalized Attention:
We provide personalized attention to every client, recognizing that:

Each case is unique with specific facts and circumstances
Investment losses can be financially and emotionally devastating
Clients deserve respect, communication, and dedicated representation

Take Action: Free Consultation for GWG Lawsuit Claims

If you invested in GWG Holdings L Bonds and suffered losses, time is critical. FINRA’s six-year eligibility rule and statutes of limitations mean that waiting too long can prevent you from pursuing your claims.

Schedule Your Free Consultation

Haselkorn & Thibaut offers free, confidential consultations to GWG L Bond investors. During your consultation, we will:

Review your investment documents and account statements
Assess whether you have viable GWG lawsuit claims
Explain the legal process and what to expect
Provide realistic expectations about potential outcomes
Answer all your questions
Help you make an informed decision about how to proceed

There is no obligation, and the consultation is completely free.

Contact Us Today

Don’t let time limitations prevent you from pursuing the compensation you deserve.

Call: 1-888-628-5590
Visit: https://investmentfraudlawyers.com/
Email: [Contact form on website]

What to Prepare

To make the most of your consultation, consider gathering:

Account statements showing GWG L Bond purchases
Trade confirmations
Account opening documents
Any offering documents or marketing materials
Correspondence with your broker
Information about your financial situation at the time of purchase

Even if you don’t have all these documents, don’t let that delay contacting us. We can help you obtain necessary documents during the investigation process.

Frequently Asked Questions About GWG Lawsuit Claims

How long do I have to file a GWG lawsuit?

FINRA’s six-year eligibility rule generally requires claims to be filed within six years of the occurrence or event giving rise to the claim. For GWG L Bonds purchased before April 2016, time may be running out. State statutes of limitations also apply and vary by state and claim type. Prompt action is critical.

What if I signed documents acknowledging the risks?

Signing disclosure documents doesn’t necessarily prevent a GWG lawsuit claim. The questions are whether the disclosures were adequate, whether they were explained to you, and whether the investment was suitable for your situation regardless of disclosure. Many investors sign documents without fully understanding them.

Can I sue if my broker no longer works at the firm?

Yes. You can pursue GWG lawsuit claims against the brokerage firm even if the individual broker has left. Firms have supervisory responsibility for their representatives’ conduct and can be held liable for unsuitable recommendations and inadequate supervision.

What if GWG is bankrupt? Can I still recover?

Yes. GWG lawsuit claims against broker-dealers are separate from GWG Holdings’ bankruptcy. You’re seeking recovery from the brokerage firm that sold you the investment, not from GWG itself. The firm’s liability is based on its conduct in recommending and selling the investment, regardless of the issuer’s bankruptcy.

How much can I recover in a GWG lawsuit?

Recovery depends on many factors including the strength of your case, the amount of your losses, and the calculation of damages. Damages can include principal losses, lost income, opportunity costs, and potentially other consequential damages. Each case is unique, and realistic expectations depend on specific circumstances.

How long does a GWG lawsuit take?

FINRA arbitration cases typically take 12-18 months from filing to hearing, though timelines vary. Some cases settle earlier through negotiation. Court litigation generally takes longer. Your attorney can provide more specific timeline estimates based on your case.

What are my chances of winning?

Each GWG lawsuit case is fact-specific, and outcomes depend on the particular circumstances, evidence, and legal issues. During your consultation, an attorney can assess your case’s strengths and challenges and provide realistic expectations.

Do I have to go to court?

Most GWG lawsuit claims proceed through FINRA arbitration, not court. Arbitration hearings are less formal than court trials. You will likely need to testify at the hearing, but your attorney will prepare you thoroughly. Some cases settle before hearing.

What does it cost to pursue a GWG lawsuit?

Most securities attorneys, including Haselkorn & Thibaut, handle GWG lawsuit cases on a contingency fee basis. This means you pay no attorney’s fees unless there is a recovery. Fees are calculated as a percentage of any recovery. The firm typically advances costs of case preparation.

What if I only lost part of my investment?

Even partial losses can support GWG lawsuit claims if the investment was unsuitable or risks were not adequately disclosed. Damages include not just principal losses but also lost income, opportunity costs, and other components. The amount of loss is one factor in evaluating whether to pursue claims, but it’s not the only consideration.

Conclusion: Protecting Your Rights in a GWG Lawsuit

The collapse of GWG Holdings and the resulting losses to L Bond investors represent a significant failure in the alternative investment marketplace. While GWG Holdings’ bankruptcy cannot be undone, investors who were sold unsuitable investments or not adequately informed of the risks may have legal recourse through GWG lawsuit claims against the broker-dealers and financial advisors who recommended these investments.

Understanding your rights, the legal basis for claims, the process for pursuing recovery, and the time limitations that apply is essential for making informed decisions about how to proceed. With FINRA’s six-year eligibility rule and statutes of limitations potentially approaching for many investors, prompt action is critical.

If you invested in GWG L Bonds and suffered losses, don’t wait. Contact Haselkorn & Thibaut today for a free, confidential consultation to evaluate your potential GWG lawsuit claims and explore your options for recovery.

Call 1-888-628-5590 or visit https://investmentfraudlawyers.com/

Disclaimer: The information contained in any post on this website is derived from publicly available sources and is not guaranteed as to accuracy and often involves allegations which may or may not be proven at some point in the future.  All posts are believed to be accurate as of the time of original posting, but the accuracy and details are subject to and expected to change over time and which may contain opinions of the author at the time posted. 