From 2012 until 2021, Dallas-based GWG Holdings sold what it called L Bonds. These were a form of privately issued alternative investment. The financial services firm intended L Bonds as an alternative to existing life insurance policies. These bonds promised to pay holders of the bonds more than the surrender values of their life insurance packages.
The L Bonds sold by GWG Holdings were illiquid and highly speculative. Customers found themselves unable to sell their bonds other than back to the holding company. In doing so, GWG Holdings hit them with hefty redemption fees. The Dallas-based financial services firm eventually ceased the sale of such bonds in April of 2021.
On January 24, 2022, customers who had purchased L Bonds received news that GWG Holdings would pause interest, maturity, dividends, and redemption payments tied to their investments. On April 20, 2022, the firm announced that it would undertake critical financial restructuring as it looked to obtain debtor-in-possession financing to make these payments.
Now, countless customers find themselves looking for effective means of GWG Holdings L Bonds loss recovery. Thankfully, Schwartz Law Firm is here to help. Read on to find out what we do to assist clients recover investment losses. But first, a closer look at GWG Holdings L Bonds loss recovery and the firm's bonds themselves.
What Is an L Bond?
The term L Bond refers to a type of unrated life insurance bond. L Bonds were conceived by GWG Holdings. They were available exclusively from the Dallas-based financial services firm and its team for around a decade, directly or via a broker. L Bonds from GWG Holdings sought to deliver high yields for bondholders in exchange for the risk that their existing life insurance policy benefits may never, in fact, pay out. Instead, GWG Holdings offered individuals the chance to replace their life insurance packages with supposedly more lucrative L Bonds. As a part of the process, GWG Holdings simultaneously acquired customers' life insurance policies on the secondary market. They would eventually become the beneficiary of these policies, having taken over their premium payments. Former policyholders, meanwhile, received GWG Holdings L Bonds in exchange.What Are 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 or 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 other than back to GWG Holdings itself. With that came a sizable redemption fee, even when L Bonds had performed poorly. Should GWG Holdings find itself bankrupt, or otherwise struggling, there would be a severe impact on bondholders. The reality in either situation was the genuine possibility that GWG Holdings would no longer be able to make its payments to its customers. Sadly, that's precisely the scenario in which GWG Holdings L Bonds customers now find themselves. GWG Holdings filed for bankruptcy protection on April 26, 2022.How to Approach GWG Holdings L Bonds Loss Recovery
GWG has ultimately fallen victim to various financial and other regulatory woes. As a result, online searches for support surrounding GWG Holdings L Bonds loss recovery have surged. For those concerned about GWG Holdings L Bonds loss recovery, it's vital to approach the matter with the support of a qualified attorney. With that in mind, 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 of GWG Holdings L Bonds loss recovery. For example, at Schwartz Law Firm, we may be able to assist in GWG Holdings L Bonds loss recovery by filing a FINRA arbitration claim on your behalf against the financial advisor who sold you the L Bonds. We can also help where a financial advisor may have made unsuitable recommendations surrounding L Bonds or misrepresented their stability. In either instance, this may amount to negligence and other professional 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 recovery, 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 mschwartz@tslfirm.com.
Matthew Schwartz
Matthew Schwartz represents clients harmed by lawyers, accountants, insurance professionals, real estate agents, brokers, financial advisors, and other trusted professionals. He handles Florida litigation and nationwide FINRA arbitration. He has been recognized in The Best Lawyers in America® and named to the Best Law Firms® list.
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