investment losses

GWG Holdings L Bond Settlement: $50.5 Million Agreement Reached with Defendants Including Beneficient and Brad Heppner – What It Means for Investors

Published on: March 7, 2025 | by Iorio Altamirano

**Update: March 14, 2025** Over the past week, the GWG Litigation Trustee has reached agreements with additional defendants to resolve various matters, all of which are subject to court approval. In addition to the previously reported conditional agreement to settle claims with Beneficient and Brad Heppner for $50.5 million and the settlement with Whitley Penn for $8.5 million (both detailed in our original post below), the Trustee has also secured settlements with Jon R. Sabes, Steven F. Sabes, and their affiliated trusts and entities for $2.3 million, as well as with the law firm Mayer Brown LLP for $30 million. Collectively, the settlements total approximately $91.3 million, or about 5.6% of the $1.6 billion of GWG L Bonds that were outstanding when GWG filed for bankruptcy in April 2022. The following is a summary of the settlements to date:

Defendants	Allegations	Settlement Amount
Brad Heppner and Beneficient (and affiliated trusts and entities)	The complaint filed on April 19, 2024, alleges that GWG Holdings, Inc. and its affiliates engaged in a fraudulent scheme involving the sale of $1.6 billion in L Bonds, misleading investors about the company’s financial health and the safety of the investments. It claims that the defendants concealed critical information, misrepresented the use of proceeds, and operated a Ponzi-like structure, ultimately harming thousands of investors when the company collapsed into bankruptcy in 2022.	$50.5 million
Whitley Penn LLP	The allegations against Whitley Penn LLP, GWG Holdings, Inc.’s auditor, include that the company failed to detect and report financial irregularities, contributing to GWG’s fraudulent scheme and subsequent bankruptcy. Whiteley Penn’s actions or inactions allegedly harmed investors.	$8.5 million
Mayer Brown LLP	The allegations against Mayer Brown LLP include that the law firm, as counsel to GWG Holdings, Inc. before and after its bankruptcy filing, provided deficient legal advice and engaged in conflicts of interest, contributing to the company’s fraudulent activities and eventual bankruptcy. Pre-bankruptcy allegations include that the law firm aided and abetted GWG fiduciaries’ breaches of their fiduciary duties in certain transactions.	$30 million
Jon R. Sabes, Steven F. Sabes, and their affiliated trusts and entities	The complaint filed on April 19, 2024, alleges that Jon Sabes, Steven Sabes, and related companies engaged in breaches of fiduciary duty and fraudulent conduct as officers, directors, or affiliates of GWG Holdings, Inc., contributing to its financial collapse and bankruptcy in 2022.	$2.3 million

Original Post:

In a significant development for GWG Holdings, Inc. L Bond investors, a $50.5 million settlement agreement was announced on March 7, 2025, aimed at resolving long-standing litigation tied to the company’s bankruptcy. At Iorio Altamirano LLP, we’ve been at the forefront of advocating for GWG L Bond investors, having already recovered over $3 million for our clients. This proposed settlement with certain defendants, including Beneficient and Brad Heppner, could impact thousands of investors who suffered losses when GWG filed for Chapter 11 bankruptcy in April 2022. Here’s what you need to know about the settlement, its implications, and how our firm can help you navigate this complex process.

Key Takeaways from the GWG L Bond Settlement

Settlement Amount: $50.5 million to be paid by Defendants’ insurers, pending court approval.
Litigation Resolved: Covers both a class action securities lawsuit and a bankruptcy adversary proceeding. The settlement resolves claims for investors who purchased GWG L Bonds between June 3, 2020, and April 16, 2021.
Distribution: Funds will be allocated to holders of Allowed Claims in GWG’s bankruptcy case, with an estimated $31.48 per $1,000 Unit of L Bonds before deductions. That’s a little over three cents for every dollar invested.
Opt-Out Contingency: The settlement could be terminated if too many investors opt out, with specific deadlines in place.
Bar Order Hearing: A hearing to finalize a bar order protecting settling Defendants is scheduled for April 16, 2025.
Next Steps for Investors: The best avenue of recovery for most GWG L Bond investors remains filing securities arbitration claims against the brokerage firm that sold these risky and speculative securities. Contact our law firm today for a free and no-obligation consultation.
Settlement with Whitley Penn: Separately, the GWG Litigation Trustee is seeking approval to settle claims with the accounting firm Whitley Penn for $8.5 million.

Understanding the GWG Holdings Settlement

Background: GWG’s Financial Collapse

GWG Holdings, Inc., a Dallas-based financial services company, marketed L Bonds as a high-yield investment tied to life insurance policies. However, the company faced mounting debt—over $1.3 billion in L Bonds—and regulatory scrutiny, culminating in its Chapter 11 bankruptcy filing on April 20, 2022. This left thousands of investors, many of whom were retirees or conservative savers, with significant losses.

Since then, litigation has unfolded to recover funds for affected investors. The recent settlement marks a pivotal step in this process, addressing claims from both a securities class action (Case No. 3:22-cv-00410-B) and a bankruptcy adversary proceeding (Adv. Pro. No. 24-03090).

Settlement Details

Announced on March 7, 2025, the $50.5 million settlement involves Lead Plaintiff Frank Moore, GWG Litigation Trustee Michael Goldberg, and Defendants, including Brad Heppner and Beneficient entities. Key points include:

Funding: The settlement is financed entirely by the Defendants’ insurers, with proceeds forming a Settlement Fund plus interest.
Scope: It resolves claims for investors who purchased GWG L Bonds between June 3, 2020, and April 16, 2021, alleging securities law violations due to misleading statements in GWG’s Registration Statement.
Distribution Process: After deductions for taxes, administration costs, and attorneys’ fees (up to $8.48 million for Class Counsel and 35% for Trust Counsel), the net fund will be distributed through GWG’s bankruptcy plan. Investors with Allowed Claims can expect an average of $31.48 per $1,000 Unit of L Bonds, though this is before deductions.

The settlement requires approval from both the U.S. District Court for the Northern District of Texas and the U.S. Bankruptcy Court for the Southern District of Texas. Notices will be sent to eligible investors with options to participate, object, or opt out.

Opt-Out Contingency: A Critical Clause

A supplemental agreement, also dated March 6, 2025, introduces an opt-out threshold. If too many class members exclude themselves, the Defendants can terminate the settlement. This contingency underscores the importance of understanding your rights:

Deadlines: Opt-out requests must be tracked, with Defendants notified 14 days before the Settlement Hearing and a termination decision due 3 days prior.
Flexibility: Investors can retract opt-outs, potentially preserving the settlement if the threshold is met post-withdrawal.

This clause adds uncertainty, making legal guidance essential for investors deciding their next steps.

Bar Order Motion: Ensuring Finality

On March 7, 2025, a motion was filed to secure a bar order, preventing third parties from pursuing GWG-related claims against settling Defendants. This protects the Defendants in exchange for committing nearly all D&O insurance proceeds to the settlement. A hearing is scheduled for April 16, 2025, at 2:30 p.m. in Houston, Texas, with notice provided via the GWG Trust website and other channels.

What This Means for GWG L Bond Investors

Limited Recovery Potential

While $50.5 million is a substantial sum, it pales in comparison to GWG’s $1.3 billion L Bond debt. The estimated $31.48 per $1,000 Unit recovery—before fees and costs—suggests a modest return for investors. For those with significant holdings, this may not fully offset losses, highlighting the need for personalized legal strategies.

Next Steps for Investors

Review Your Eligibility: Confirm if you hold an Allowed Claim under GWG’s bankruptcy plan.
Evaluate Options: Decide whether to participate, opt out, or object to the settlement, keeping opt-out deadlines in mind.
Seek Legal Advice: The complexity of this settlement, coupled with the opt-out contingency and bar order, requires expert guidance to maximize recovery.

How Iorio Altamirano LLP Can Help

At Iorio Altamirano LLP, we’ve recovered over $3 million for GWG L Bond investors through diligent advocacy and strategic litigation against broker-dealers and registered investment advisory firms that sold the GWG L Bonds to retail investors.

With the recovery to investors through the GWG Litigation Trustee’s efforts are likely to be nominal (in this case, a little over three cents for each dollar invested into GWG L Bonds), 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.

Our experience positions us uniquely to assist you in this settlement process:

Case Evaluation: We’ll assess your potential claims, explain your options, and guide you through the arbitration process.
Maximizing Recovery: Beyond this settlement, we explore additional avenues to recover losses, including claims against brokers or advisors who recommended GWG L Bonds.
Proven Results: Our track record speaks for itself—our clients trust us to fight for their financial recovery. We know as much about what happened with GWG Holdings, Inc. and how brokerage firms sold the risky and speculative GWG L Bonds as anyone.

Stay Informed: Key Dates and Resources

March 6, 2025: Settlement and opt-out contingency agreements signed.
April 16, 2025: Bar order hearing in Houston, Texas.
GWG Trust Website: Visit gwgholdingstrust.com/litigation-trust/ for updates.
Court Filings: Access documents via the Northern District of Texas (Case No. 3:22-cv-00410-B) and Southern District of Texas Bankruptcy Court (Case No. 22-90032).

Contact Iorio Altamirano LLP Today

Iorio Altamirano LLP is a securities arbitration law firm in New York, NY. We represent investors nationwide and vigorously pursue FINRA arbitration claims on behalf of investors to recover investment losses.

Iorio Altamirano LLP was at the forefront of the investigation into the GWG L Bonds starting in late 2021 and has already helped investors recover over $3 million in losses.

Don’t leave your recovery to chance—contact Iorio Altamirano LLP for a free consultation. Call us toll-free at (855) 430-4010 or click the below link to discuss how we can help you secure the compensation you deserve.

Click Here to Schedule Your Free Consultation

Holland & Knight Sued for $150 Million: What It Means for GWG L Bondholder

Published on: March 3, 2025 | by Iorio Altamirano

If you’re a GWG L Bond investor, the past few years have likely been a rollercoaster of frustration and uncertainty. The bankruptcy of GWG Holdings, Inc. in 2022 left thousands of investors—many of whom are retirees or conservative savers—reeling from significant financial losses. At Iorio Altamirano LLP, we’ve been fighting tirelessly for GWG L Bondholders, successfully recovering over $2 million in claims against brokerage firms that misrepresented or inappropriately recommended these risky investments.

Now, a development in the GWG bankruptcy case could open new doors for recovery. On February 28, 2025, the bankruptcy trustee tasked with recovering funds for GWG creditors filed a lawsuit against the prominent law firm Holland & Knight. The complaint, accessible via the GWG bankruptcy docket (Case No. 22-90032, Docket No. 2531), seeks nearly $150 million in damages, alleging that Holland & Knight knowingly participated in a “fraudulent looting scheme and associated criminal enterprise” alongside Dallas-based Beneficient and its CEO, Bradley Heppner.

What Are GWG L Bonds, and Why Did They Fail?

UBS Hit with $92 Million FINRA Arbitration Award Over Risky Tesla Short Strategy

Published on: March 3, 2025 | by Iorio Altamirano

On February 28, 2025, a FINRA arbitration panel delivered a staggering $92 million award against UBS Financial Services, Inc. and its broker, Andrew Burish, marking one of the largest investor victories in recent memory. The case, FINRA No. 21-00488, involved nine claimants who alleged that UBS and Burish mismanaged their accounts by recommending an unsuitable, high-risk strategy of shorting Tesla, Inc. stock. This landmark ruling underscores the accountability of financial giants and the potential for investors to recover losses through arbitration. As a securities arbitration law firm that recently secured a $65,000 award for our client in a GWG L Bonds case (FINRA Case No. 24-00004), we are proud to highlight how cases like these demonstrate the power of FINRA arbitration to deliver justice.

Case Background: A Risky Bet Gone Wrong

The claimants filed their initial Statement of Claim on February 22, 2021, accusing UBS and Burish of breach of fiduciary duty, violation of FINRA suitability rules, negligent supervision, and fraud. The allegations centered on a high-stakes trading strategy that involved shorting Tesla stock—a speculative move designed for short-term gains rather than the long-term wealth preservation the claimants sought. According to the amended claim, UBS and Burish pushed this aggressive approach, provided boilerplate paperwork to unsophisticated investors, and encouraged holding these risky positions despite ballooning losses.

GPB Capital Co-Founders Found Guilty of Fraud on All Accounts

Published on: August 1, 2024 | by Iorio Altamirano

Notice to GPB Capital Investors: Iorio Altamirano LLP Continues to Investigate The Sale of GPB Capital Private Placement Offerings to Retail Investors

A federal grand jury found GPB Capital Holdings co-founders David Gentile and Jeffry Schneider guilty of fraud. The charges are related to their management of the company, which has been described as a “Ponzi-like scheme.” In February 2021, the SEC also charged GPB Capital, Ascendant Capital, and Ascendant Alternative Strategies with running a Ponzi-like scheme that raised roughly $1.7 billion from securities issued by GPB Capital. According to authorities, the firm raised more than $1.7 billion from over 17,000 investors, many of whom were retirees.

The jury found David Gentile guilty of conspiracy to commit securities fraud, conspiracy to commit wire fraud, securities fraud, and wire fraud. Jeffrey Schneider was found guilty of securities fraud and wire fraud.

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.