Bonds

Western International Securities and LifeMark Securities Corp. Settle Alleged Regulation Best Interest Violations Related to the Sale of GWG L Bonds

Published on: August 1, 2024 | by Iorio Altamirano

What You Need to Know:

On July 31, 2024, the SEC announced that it had reached an agreement with Western International Securities and five of its registered representatives to settle an ongoing lawsuit arising out of the sale of high-risk and speculative L Bonds issued by the now-bankrupt GWG Holdings, Inc.
On July 28, 2024, the SEC fined broker-dealer LifeMark Securities Corp. for failing to comply with Regulation Best Interest connected with recommending GWG L Bonds to retail customers between July 2020 and January 2022 without exercising reasonable diligence, care, and skill to understand the potential risks, rewards, and costs associated with the recommendations.

Emerson Equity Appears to Have Paid Over $6 Million in Defending and Settling GWG L Bond Claims

Published on: February 21, 2024 | by Iorio Altamirano

In recent court filings, Emerson Equity LLC has disclosed that it has paid over $2.1 million in attorney fees and arbitration costs through January 1, 2024, to defend itself from more than 60 customer complaints related to its sale of GWG L Bonds. In addition, according to public disclosure reports for its brokers, Emerson Equity LLC has paid over $4.2 million in settlements in 2023 and the first few days of 2024.

The customer complaints are primarily FINRA securities arbitration complaints that were brought by GWG L Bond investors who were sold speculative, high-risk, illiquid, high-commission, and unrated GWG L Bonds by the firm’s brokers, including Tony Barouti. More than half of Emerson Equity’s GWG L Bond-related customer disputes arise out of recommendations made by Mr. Barouti.

Although Emerson Equity’s legal fees and settlements have surpassed $6 million, the cost represents less than one-third of the $20.1 million that the firm received from GWG Holdings Inc. for brokerage services from June 2018 through June 2022.

Iorio Altamirano LLP Investigates Ausdal Financial Partners, Inc. for the Sale of GWG L Bonds

Published on: February 20, 2024 | by Iorio Altamirano

Iorio Altamirano LLP and its experienced GWG Holdings L Bonds attorneys, representing retail investors nationwide, continue to investigate and file claims against Ausdal Financial Partners, Inc. for its sale of speculative, high-risk, illiquid, high-commission, and unrated GWG L Bonds to retail investors.

The law firm’s investigation is ongoing after three separate arbitration panels awarded investors damages in connection with the sale of L Bonds by their financial advisors and firms.

In addition to these arbitration awards, brokerage firms have settled cases with investors who have filed arbitration claims. According to our law firm’s review of public disclosure reports of individual brokers, Ausdal Financial Partners and/or its brokers have been the subject of at least 26 customer disputes connected with its sale of GWG L Bonds to retail investors. Of the 26 disclosed disputes, 12 are still pending, and 14 have been settled. The cases that have been settled have recovered an average of approximately 41% of the alleged damages, with a range of recoveries primarily between 30 and 70%. Some of these matters involved a variety of securities in addition to GWG L Bonds.

GWG L Bonds Update: GWG Wind Down Trust Files Quarterly Report (February 15, 2024)

Published on: February 15, 2024 | by Iorio Altamirano

On February 15, 2024, the GWG Wind Down Trust filed a status report with the United States Bankruptcy Court for the Southern District of Texas for the quarter ending December 31, 2023. Although the status report did not include an updated financial statement, there are several key takeaways:

The GWG Wind Down Trust has sold two of its three tangible assets for a total of approximately $10.58 million.
The sale of its life insurance policy portfolio generated $10 million in cash.

Iorio Altamirano LLP Continues to Investigate Centaurus Financial for the Sale of GWG L Bonds

Published on: November 15, 2023 | by Iorio Altamirano

Iorio Altamirano LLP and its experienced GWG Holdings L Bonds attorneys continue to investigate and file claims against Centaurus Financial for its sale of risky and speculative GWG L Bonds to mom-and-pop investors.

The law firm’s investigation is ongoing after two separate FINRA arbitration panels awarded investors damages in connection with the sale of L Bonds by their brokers and brokerage firms. In the first case, an arbitration panel in Los Angeles, California, held two brokers liable for their negligence in selling GWG L Bonds to an investor and awarded over $1 million in damages. In the second case, a FINRA arbitration panel in Boston, Massachusetts, awarded an investor $280,000 in damages, finding that brokerage firm Ages Financial Services, LTD was liable for not properly informing the investor about the risks of GWG L Bonds.

Iorio Altamirano LLP represents dozens of GWG L Bond investors across the country and encourages investors who are taking a “wait and see approach” to act now. As the GWG Wind Trustee begins to liquidate GWG’s assets, it is becoming more evident that the GWG L Bonds, now the New Series A1 WDT Interests, are nearly worthless.

“I continue to believe that the [GWG] L Bondholders will lose a very large percentage of their investments” – Bankruptcy Judge Marvin Isgur

Published on: October 6, 2023 | by Iorio Altamirano

**Update: November 1, 2023** On October 13, 2023, the GWG Wind Down Trust sold two of its four assets for only approximately $10.5 million. The GWG Wind Down Trust sold its largest tangible asset, its portfolio of life insurance policies, realizing only $10 million in cash. In addition, on October 13, 2023, the GWG Wind Down Trust sold its equity interest in Foxo Technologies, Inc. for $586,943. The $10.5 million in recovery represents approximately 0.8% of the $1.3 billion in obligations owed to L Bond investors/creditors.

Further, over the past month, the share price of Beneficent has continued to fall and is currently trading at approximately $0.60 per share.

We continue to believe that GWG L Bonds investors’ best avenue for potential recovery of losses is to file a separate FINRA arbitration claim against their brokerage firms. Iorio Altamirano LLP has already helped GWG L Bond investors recover over $1.4 million in losses.

GWG’s Bankruptcy Plan Goes into Effect; GWG L Bonds Canceled

Published on: August 2, 2023 | by Iorio Altamirano

On August 1, 2023, GWG Holdings, Inc.’s Chapter 11 bankruptcy plan (the “Plan”) went into effect.

As part of the Plan, GWG will be liquidated, and two liquidating trusts have been created: (i) the Wind Down Trust and (ii) the Litigation Trust.

As a result of the Plan going into effect, all securities issued by GWG, including GWG L Bonds, were canceled. L Bondholders received “New Series A1 WDT Interests” in the Wind Down Trusts.

GWG Bankruptcy Update (July 14, 2023): The Residual Value of the GWG L Bonds Remain Suspect as Beneficient Receives a Wells Notice from the SEC

Published on: July 14, 2023 | by Iorio Altamirano

On June 20, 2023, the United States Bankruptcy Court for the Southern District of Texas entered an Order confirming GWG’s Further Modified Second Joint Chapter 11 Plan (the “Chapter 11 Plan”).

GWG has disclosed that they are targeting July 31, 2023, as the effective date for the Plan.

As part of the Chapter 11 Plan, GWG will no longer operate as an ongoing concern. Instead, the Chapter 11 Plan provides that the GWG will be liquidated, and two liquidating trusts will be created: (i) the Wind Down Trust and (ii) the Litigation Trust.

What L Bondholders Need to Know About GWG Holdings, Inc.’s Chapter 11 Plan

Published on: April 22, 2023 | by Iorio Altamirano

On April 21, 2023, United States Bankruptcy Judge Marvin Isgur approved GWG’s Disclosure Statement that will be sent to creditors to vote on GWG’s Chapter 11 Plan (the “Plan”). The approval of the Disclosure Statement comes one year and one day after GWG filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Southern District of Texas.

The Plan will now be sent to creditors, including L Bondholders, to accept or reject the Plan. GWG’s Plan is essentially an “orderly” liquidation. If the Plan is accepted, GWG will be liquidated in accordance with the terms of the Plan. If the Plan is rejected, GWG will likely be liquidated in accordance with Chapter 7 of the United States Bankruptcy Code. Either way, GWG will be liquidated and will not continue as a business. Creditors will need to decide which path of liquidation will be more favorable to them.

We believe that it is highly unlikely that L Bondholders will obtain a quick and full recovery through either the Chapter 11 Plan or a Chapter 7 liquidation.

GWG Bankruptcy Update (April 17, 2023): Liquidation Options Become Clearer as Recovery for Bondholders Remain Uncertain

Published on: April 17, 2023 | by Iorio Altamirano

**Update: April 22, 2023** On April 21, 2023, the Bankruptcy Court approved GWG’s further revised Disclosure Statement for its Second Amended Reorganization Plan. The Plan will now be sent to creditors, including L Bondholders, to accept or reject the Plan. For more information, please visit our most recent blog post: What L Bondholders Need to Know About GWG Holdings, Inc.’s Chapter 11 Plan.

Original Post:

GWG Bankruptcy Update (April 17, 2023): Liquidation Options Become Clearer as Recovery for Bondholders Remain Uncertain