A California broker-dealer that sold high-risk bonds issued by a financially troubled company has filed for bankruptcy, according to Investment News.
JRL Capital Corp. filed last month for Chapter 7 bankruptcy in U.S. Bankruptcy Court for the Central District of California. The Irvine-based company took the action while faced with growing legal costs stemming from claims filed against it by 15 investors.
JRL reported total assets of $43,000 and total investor claims of $2.5 million. The company had offered clients L Bonds issued by GWG Holdings, which itself filed for Chapter 11 bankruptcy protection in April 2022. GWG Holdings utilized a network of registered representatives and independent broker-dealers to sell $1.6 billion in bonds backed by life settlements.
On January 15, 2022, GWG failed to pay over $13 million in principal and interest payments to L Bond investors. The missed payments sparked alarm in investors who assumed they were investing in a safe investment vehicle.
JRL Capital said the arbitration claims filed against it, if successful, would cause the firm to become insolvent. JRL filed a termination notification with the Financial Industry Regulatory Authority. In its BrokerCheck profile, JRL said that although management believed they would be successful in their defense, “the cost to continue the arbitration pursuit was well beyond the firm’s ability to fund such activity.”
The Securities and Exchange Commission contacted JRL Capital and other broker-dealers last year about offering clients the bonds issued by GWG. L Bonds were sold by 145 broker-dealers nationwide, according to GWG’s Chapter 11 filing.
If you invested in GWG L Bonds and lost money, you may be able to file an arbitration claim with FINRA against your brokerage firm. The securities attorneys at Hyman Cotter PC bring decades of industry and regulatory experience to your case. Call 312-291-4600 today to speak with an attorney about your case during a no-cost, no-obligation case review. Headquartered in Chicago, our attorneys represent investors nationwide in misconduct, securities fraud and investment loss claims.
