Securities Arbitration Lawyer Blog
After months of working with legal and financial advisors to try and restructure outside of court, on April 20, 2022, GWG Holdings, Inc. filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Southern District of Texas. The bankruptcy filing is a significant and troublesome development for GWG L Bond investors who invested substantial portions of their life savings into GWG L Bonds. According to GWG’s latest filing with the SEC, GWG has more than $1.6 billion in aggregate principal outstanding to GWG L Bond investors. A Chapter 11 bankruptcy will allow GWG Holdings to propose a reorganization plan.
Investment News has reported that one anonymous GWG L bond investor estimates that the GWG L Bonds may now be worth 20 to 30 cents on the dollar. Despite the unwelcomed news, GWG L bond investors are not without recourse. Many retail investors, including those represented by securities arbitration law firm Iorio Altamirano LLP, are filing securities arbitration claims against brokerage firms that sold these speculative, high-risk, and illiquid financial products. These actions are separate and in addition to the bankruptcy proceedings.
GWG Holdings’ bankruptcy filing revealed for the first time that the ongoing investigation by the United States States Securities and Exchange Commission (SEC) includes an examination of sales practices of the GWG L Bonds by the Selling Group, including Emerson Equity LLC and its network of regional broker-dealers. According to the recent bankruptcy filing, the SEC issued subpoenas and document requests to individual brokerage firms beginning in late-2021.
Investors who purchased the L Bonds offered by GWG Holdings are encouraged to contact Iorio Altamirano LLP for a free and confidential consultation and to review their legal rights. We can review and analyze potential claims and advise individuals of their legal rights without obligation or cost.
For the latest on Iorio Altamirano LLP’s investigation of GWG L Bonds, visit our firm’s investigation page: Iorio Altamirano LLP’s Investigation of GWG L Bonds.
GWG L Bonds and Brokerage Firm Liability
GWG sold the L bonds through Emerson Equity LLC and a network of regional broker-dealers, who pitched the products to individual retail investors. The network of regional broker-dealers who sold L Bonds and shared in the selling commissions included the following firms, as well as other broker-dealers:
- Centaurus Financial, Inc.
- Great Point Capital LLC.
- National Securities Corporation.
- Western International Securities, Inc.
- Aegis Capital, LLC.
- Dempsey Lord Smith, LLC.
- Coastal Equities, Inc.
- International Assets Advisory, LLC.
- Arete Wealth Management, LLC.
- Capital Investment Group, Inc.
- Lifemark Securities, Corp.
- Westpark Capital, Inc.
- Ausdal Financial Partners, Inc.
- Moloney Securities.
- IFP Securities, LLC.
- Center Street Securities.
- Cabot Lodge Securities LLC.
- Kingswood Capital Partners, LLC.
- American Trust Investment Services, Inc.
- Ages Financial Services, LTD.
- Landolt Securities, Inc.
- Intervest International Equities Corporation.
- Titan Securities.
- NI Advisors.
- JRL Capital Corporation.
- The FIG Group, LLC.
- M Stevens Securities, LLC.
Brokerage firms are required to make investment recommendations that are suitable and in the best interest of their customers. GWG’s L Bonds are speculative, high-risk, and illiquid securities sold as private placement offerings by brokerage firms across the country. The L Bonds were likely not suitable for investors with a low or moderate risk tolerance or investors who had liquidity needs.
Brokerage firms and financial advisors must also disclose all material facts and risks of a security when making a recommendation. Through the course of Iorio Altamirano LLP’s investigation, investors informed the firm that they were not aware that GWG significantly changed its business model beginning in 2018 or that GWG used investor capital to pay out high distributions to other GWG L bond investors in a Ponzi-like scheme.
When a firm or advisor fails to meet these standards of conduct, they can be held liable for damages.
Firms and brokers must also conduct reasonable due diligence on products they offer before recommending them to any retail investor. There are serious concerns that some broker-dealers recommended GWG’s L Bonds to customers without first conducting sufficient due diligence on the GWG L bonds or GWGH.
How to Recover Losses or Obtain a Free Consultation
In light of the bankruptcy filing, L bond investors are encouraged to immediately contact Iorio Altamirano LLP to review their legal rights. Iorio Altamirano LLP is representing numerous GWG L bond investors in filing securities arbitration claims against firms such as Emerson Equity LLC and Centaurus Financial, Inc. for sales practice violations connected to the solicitation and sale of GWG L Bonds.
Iorio Altamirano LLP is a securities arbitration law firm located in New York, NY. We represent investors nationwide and vigorously pursue FINRA arbitration claims on behalf of investors to recover investment losses.
We have nearly 20 years of combined experience as securities arbitration lawyers and have helped investors recover investment losses in over 1,000 cases. Our firm will file a FINRA securities arbitration claim on your behalf on a contingency fee basis to try to recover your losses. If we do not obtain a recovery, you do not owe us a legal fee.
If you or a loved one has invested in L Bonds offered by GWG Holdings, contact securities arbitration lawyers August Iorio at august@ia-law.com or Jorge Altamirano at jorge@ia-law.com. Alternatively, call the firm toll-free at (855) 430-4010.