Can I Recover My GWG L Bond Losses?

Sources say that GWG Holdings is preparing to file Chapter 11 bankruptcy, which would likely lead GWG L Bonds investors to suffer a significant loss of their principal.

Silver Law Group currently represents GWG L Bonds investors in claims against the selling brokerage firm, and may be able to help you recover your L Bond losses. Please contact us at 800-975-4345 for a no-cost, confidential consultation.

GWG Holdings Inc. (GWGH) is a Texas-based alternative asset manager that sold $1.6 billion of L Bonds, which are bonds from a life insurance company that buys the policy back from the policyholder. GWG used regional broker-dealers and advisory firms around the country, such as Emerson Equity, to sell their L Bonds.

Investors have told Silver Law Group that brokerage firms described GWG L Bonds as a safe and secure source of income. But L Bonds actually involve substantial speculation and risk, and they are illiquid.

Investors were drawn to the above average returns that L Bonds paid, between 5.5%-8.5%, with terms from 2-7 years. GWG has stated that it relied on L Bond sales for liquidity.

Reports of GWG’s bankruptcy are not completely unexpected. The company has had multiple issues that have given investors concern. In January, 2022, GWG filed an 8-K with the SEC that stated they would not be paying investors dividends on L Bonds for January, 2022 and that management had been approved to retain a restructuring advisor.

GWG is also under investigation by the SEC and has missed financial reporting deadlines, causing NASDAQ to threaten to delist the company. News of the expected bankruptcy has caused GWG’s already-depressed stock price to fall to as low as $1.45 per share after starting 2022 at $9.60 per share.

Silver Law Group Files GWG Class Action

In February, 2022, Silver Law Group and co-counsel filed a class action lawsuit against GWG Holdings and some of its principals to recover losses suffered by GWG L Bonds investors. The complaint alleges violations of the federal securities laws and was filed in the United States District Court, Northern District of Texas.

The lawsuit seeks to recover “significant losses and damages” caused by GWG’s “wrongful acts and omissions”.

GWG’s expected bankruptcy filing means that all cases and potential claims against the company are stayed and can only move forward through the proceedings in bankruptcy court. Unfortunately for investors in GWG L Bonds, this means they will incur a substantial loss in value of their investments and, based on our experience, they will not be able to recover much, if anything, from creditor claims against GWG entities.

GWG FINRA Arbitration Claims

A bankruptcy filing by GWG will not prevent investors in GWG L Bonds from pursuing FINRA arbitration claims against the financial advisors, brokers, and firms that negligently recommended those investments to them.

Investors may claim that the firms who sold them GWG L Bonds failed to perform adequate due diligence into the bonds, that the investment was unsuitable for their needs, and/or that their portfolio was overconcentrated in the investment, and that they are therefore entitled to compensation for their losses.

As recently quoted in InvestmentNews, firm principal Scott Silver said “We find the potential bankruptcy of GWG Holdings very disappointing for the retail investors who put their life savings in these L Bonds . . .  Those investors now face the risk of substantial losses of their principal and retirement savings…We look forward to continuing to investigate this matter, the individuals at GWG and the small broker-dealers who sold this incredibly risky product to retail investors.”

Contact Silver Law Group If You Have Losses With GWG L Bonds

If you invested in L Bonds from GWG Holdings, contact Silver Law Group for a no-cost, confidential consultation at (800) 975-4345 or by email at ssilver@silverlaw.com.

Silver Law Group is a nationally-recognized law firm with experience representing investors in securities arbitration and investment fraud cases. Scott Silver, Silver Law Group’s managing partner, is the chairman of the Securities and Financial Fraud Group of the American Association of Justice. Our attorneys are admitted to practice in New York and Florida and represent investors nationwide. Most cases are handled on a contingency fee basis, so nothing is owed unless and until we recover your money for you.