Investor Notice: GWG L Bonds

If You Lost Money Investing In GWG L Bonds, We Can Help

On April 20, 2022, GWG Holdings, Inc., (“GWG”) announced it was filing for Chapter 11 bankruptcy. The bankruptcy filing is the culmination of financial trouble plaguing the company.

On January 15, 2022, GWG failed to pay over $13 million in principal and interest payments to L Bond investors. The missed payments sparked understandable alarm in investors who assumed they were investing in a safe investment vehicle.

The missed payments were the culmination of red flags that highlighted looming danger. GWG was delinquent in filing its annual report with the SEC in 2020. Another red flag came in December 2021 when Grant Thornton, GWG’s independent accounting firm, announced their separation from the firm. This departure came months after GWG admitted that previous financial statements might be unreliable.

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 Lewitas Hyman bring decades of industry and regulatory experience to your case.

Call (888) 655-6002 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.

What Are L Bonds?

L Bonds are bonds issued by insurance companies to help pay for life insurance contracts on a secondary market. The term ‘bond’ may lead investors to believe this is a safe investment. The reality is that while these bonds did pay a high yield – which is what made them so attractive in the first place – the high yield came at the price of higher risk.

Not only were these investments high-risk, but they were also extremely illiquid as investors could not sell their L Bonds on the secondary market, nor could they be redeemed before their maturity date. The bonds could only be redeemed early if GWG agreed, but that early redemption came with a 6% penalty.

Being both highly risky and highly illiquid makes L Bonds unsuitable for most retail investors and are particularly damaging for retirees and those with otherwise low risk tolerance.

You Have A Right To Pursue Compensation For Your Losses

If your broker or financial advisor recommended L Bonds for your portfolio, you might be able to file a FINRA arbitration claim against their firm for:

  • Suitability: As mentioned previously, L Bonds are risky, illiquid investments that are unsuitable for many retail investors.
  • Lack of due diligence: Brokerage firms are required to thoroughly analyze the investment products they recommend.
  • Inadequate supervision: Firms have an obligation to adequately supervise their brokers and registered representatives to ensure compliance with industry rules and regulations.
  • Misrepresentation and/or omission: Brokers and/or firms may have sold GWG L Bonds as a safe, conservative investment.

L Bonds were sold by 145 broker-dealers nationwide, according to GWG’s Chapter 11 filing. The most notable firm to sell the bonds is Emerson Equity which acted as the managing broker-dealer for the GWG issuer.

Our Attorneys Are Ready To Represent GWG L Bond Investors

Individuals who invested in GWG L Bonds can call (888) 655-6002 or use our online contact form to schedule a no-cost evaluation today. We can help investors nationwide understand their options for recovering damages for their losses.