If you purchased GWG Holdings L Bonds from a broker-dealer or financial advisor, then you may be able to seek recourse against the firm that sold you GWG L Bonds. We understand the brokerage firms that sold GWG L Bonds include, Aegis Capital Corp., Cabot Lodge Securities, Capital Investment Group, Centaurus Financial, Center Street Securities, Coastal Equities, Emerson Equity, Landolt Securities, Lion Street Financial, National Securities, Newbridge Securities and Stiba Wealth Management. Our investigation has revelated that these firms, and their fainancial advisors, sold GWG L Bonds as safe and secure fixed-income products despite the fact they were illiquid, high risk and unsuitable for many clients.
What Were the Risks of L Bonds?
L Bonds were a part of an investment strategy involving viatical settlements. Via its L Bonds scheme, GWG Holdings would purchase existing life insurance policies with a view to making a profit. GWG Holdings calculated profits by aligning customers’ life expectancies with the business’s potential returns. Risks existed on both sides of the equation. Yet, those opting to replace their existing life insurance policies with GWG Holdings L Bonds found themselves most exposed. Among the most significant risks involved the highly speculative and illiquid nature of GWG Holdings’ L Bonds. Furthermore, the bonds were also what’s known as callable. GWG Holdings maintained its right to call and redeem customers’ L Bonds as it saw fit and without penalty. Accordingly, bondholders were left dangerously exposed and at significant risk. This potential risk routinely saw inquiries surrounding GWG Holdings L Bonds loss recovery made well ahead of the termination of the sale of such bonds in 2021.
What’s Going on with GWG Holdings L Bonds?
Those looking for help with GWG Holdings L Bonds loss recovery may not be aware of the current circumstances surrounding the Dallas-based financial services firm’s most well-known product. First of all, it’s essential to understand that, as far as GWG Holdings L Bonds are concerned, the company generally paid bondholders an annual or semiannual coupon rate. That was to be the case for the duration of the life of any L Bonds issued by GWG Holdings. Unfortunately, GWG Holdings’ L Bonds were illiquid investments. With no secondary public market, there was no option to sell the L Bonds other than back to GWG Holdings. With that came a sizable redemption fees, even when L Bonds had performed poorly. As investors likely know, GWG Holdings filed for bankruptcy protection on April 26, 2022 after the Company defaulted on $3,500,000 in principal payments and $10,350,000 on interest payments to investors on L Bond holders. On May 17, 2022, GWG notified the Securities and Exchange Commission of its inability to file its required Quarterly Report because GWG allegedly needed more time to complete its financial statements and disclosures.
How to Approach GWG Holdings L Bonds Losses
GWG has ultimately fallen victim to various financial and other regulatory woes. For investors concerned about GWG Holdings L Bonds losses, it’s vital to approach the matter with the support of a qualified attorney. The Schwartz Law Firm is available to help you navigate your potential claim. GWG Holdings stated in its prospectuses that investing in L Bonds could be considered speculative. The company also outlined the potential for a high degree of risk, including losing the entirety of an investment amount. However, all is not lost in terms recovering your losses. For example, at the Schwartz Law Firm, we may be able to assist investors by filing a FINRA arbitration claim against the brokerage-firm, or financial advisor, who sold you the L Bonds. We can also help where your financial advisor may have made unsuitable recommendations surrounding L Bonds or misrepresented their suitability. In either instance, this may amount to negligence and other regulatory violations, which could prove central to successfully recovering your losses.
If you’re concerned in any way about your investment, or need GWG Holdings L Bonds loss guidance, please contact Schwartz Law Firm online to arrange a no-obligation consultation. Alternatively, call 866-618-0545 to immediately speak to a member of our team or email Matthew Schwartz at [email protected].