Erez Law is currently investigating brokers across the country. These brokers include Centaurus Financial, Inc., Aegis Capital Corp., Emerson Equity LLC, Newbridge Securities Corp., Coastal Equities, Moloney Securities Co., Inc., Stonecrest Capital Markets, Inc., Westpark Capital Inc., Cabot Lodge Securities, LLC, Portsmouth Financial Services, Lifemark Securities Corp., American Equity Investment Corporation, NPB Financial Group, LLC, and other brokerage firms who recommended their clients invest in GWG Holdings Inc. L Bonds, resulting in millions of dollars of investment losses to investors between 2012 and 2021. Public records indicated that hundreds of broker-dealers may have sold up to $2 billion worth of the Inc. L Bonds, a high-yield junk bond. However, a recent bankruptcy filing may mean that investors will be without legal recourse if they don’t retain private counsel to sue the brokerage firm that sold them GWG.
Recent Update on GWG Holdings
In April 2022, GWG Holdings, Inc. filed for Chapter 11 bankruptcy proceedings. The company offered to settle liabilities of $1.6 billion for $50.5 million on March 7, 2025. This will leave defrauded investors with mere pennies on the dollar for their significant investment losses. Investors need to retain private counsel to sue the brokerage firm that sold the GWG investments, or they will receive next to nothing in bankruptcy proceedings.
GWG Holdings Investigation. Did You Lose Money?
GWG Holdings Inc. is an alternative asset manager that issued a series of high-yield bonds known as L Bonds, backed by life settlements. The company pooled money from bond investors to purchase life insurance policies on the secondary market; the company then used payouts from the policies when people died to repay investors.
The GWG Holdings Inc. L Bonds had maturity ranging from two to seven years and paid an interest rate of 5.50% to 8.50%. GWG recommended the L Bonds to investors as offering a guaranteed return of principal plus interest. However, they were illiquid private placements that were high-risk and speculative. As a result, GWG Holdings Inc. L bonds were a non-conventional and high-risk investment product and not a low-risk investment, as many brokers and brokerage firms indicated. Emerson Equity LLC is the managing broker-dealer for the GWG issuer. According to the firm’s website, the firm primarily focuses on selling private placements.
The L Bonds were illiquid, which meant that if the bond performed poorly, the bondholder still had to hold onto it until maturity, or they were subject to pay a 6% redemption fee to sell it.
Brokerage Firms That Sold GWG Holdings Inc. L Bonds
Many brokers at brokerage firms across the country recommended their clients invest in GWG Holdings Inc. L Bonds. The firms include:
- Accelerated Capital Group
- Aegis Capital Corp.
- Americal Equity Investment Corporation
- American Trust Investment Services, Inc.
- Arque Capital, Ltd.
- Ausdal Financial Partners, Inc.
- Cabot Lodge Securities LLC
- Cape Securities Inc.
- Capital Investment Group, Inc.
- Centaurus Financial, Inc.
- Center Street Securities
- Coastal Equities
- Dempsey Lord Smith, LLC
- Emerson Equity LLC
- G.A. Repple & Company
- IFP Securities
- Intervest International Equities Corporation
- JRL Capital Corporation
- Kingswood Capital Partners
- Landolt Securities, Inc.
- Lifemark Securities Corp.
- Madison Avenue Securities, LLC
- Moloney Securities Co., Inc
- Newbridge Securities Corp.
- NPB Financial Group, LLC
- Portsmouth Financial Services
- Stonecrest Capital Markets, Inc.
- Western International Securities, Inc.
- Westpark Capital, Inc.
Erez Law represents customers of Newbridge Securities Corp., Centaurus Financial, Inc., and other brokerage firms who suffered investment losses due to their brokers’ recommendations. The investment loss attorneys at Erez Law are also investigating Aegis Capital Corp. and Emerson Equity LLC, brokers. They made unsuitable recommendations that resulted in losses due to investments in GWG Holdings Inc. L. Bonds.
Recent GWG Holdings News
GWG Holdings investigations have found the following fraudulent actions:
In August 2021, GWG Holdings Inc.’s board of directors identified that certain issued financial statements, including its annual report for the year-end 2019, and the quarterly reports for the first three quarters of 2020, should no longer be relied upon.
In December 2021, the company’s auditor resigned, a signal of trouble for a financial services firm. However, according to the SEC filing, the auditor said its most recent audit did not contain an adverse opinion about the company and there was no disagreement between the auditor and GWG Holdings Inc.
The company also missed $13.6 million in combined interest and principal payments for its L Bonds. According to the January 2022 filing with the Securities and Exchange Commission (SEC), the company has a 30-day grace period to make the payments; if it does not do so, it will default. As a result, default on the L Bonds appeared imminent and might leave many investors with a total loss of their investments.
In January 2022, the company sought the services of a restructuring financial advisor, FTI Consulting, Inc., and Mayer Brown LLP as a restructuring legal advisor to assist in identifying and evaluating alternatives concerning its capital structure and liquidity, as well as available options for maximizing the value of the company’s assets and meeting its financial obligations.
In January 2022, the company announced that it had paused L Bond sales retroactively to January 10, 2022. According to the announcement, “While asset sales may provide near-term liquidity, the value the Company expects to receive in those transactions would likely be at a significant discount to the fair market value of the assets, and, without a reliable expectation of when the Company can get back to a sustainable capital raise with the L Bonds, the Company believes it is not in the best interest of GWGH’s investors to pursue these transactions at this time.” Additionally, the company “did not make its January 15, 2022 interest and maturity payments on its L Bonds and paid the January 15, 2022 dividends on its Redeemable Preferred Stock and Series 2 Redeemable Preferred Stock in additional shares of the applicable series of the preferred stock following the terms of the certificates of designation for the Redeemable Preferred Stock and Series 2 Redeemable Preferred Stock, while continuing to defer requests for redemptions.”
Public records indicate that the firm was delayed in filing its financial statements with the SEC, preventing it from raising investors’ capital. As a result, in April 2021, the company voluntarily suspended its L Bond offerings. After auditing the restated financials, the company reopened the sale of the L Bond on December 1, 2021. According to the company announcement, “During the eight months GWGH was not selling L Bonds in 2021, the Company used liquidity reserves and financings of our assets to fund operations and service our debt obligations.” The firm also said that it was going to keep deferring redemption requests.
While GWG Holdings Inc. has close to $1 billion in assets, the company has over $1.5 billion in outstanding L Bonds. As a result, GWG Holdings Inc. will not have enough assets to cover the liquidation if that avenue is pursued.
In April 2022, GWG Holdings, Inc. and two subsidiaries filed for Chapter 11 bankruptcy proceedings. The company allegedly has $1.6 billion in liabilities in L Bonds. It offered to settle these debts for a mere $50.5 million on March 7, 2025.
How Our GWG Bonds Lawyers Can Help You
The bankruptcy proposal would pay investors a mere 3 cents on the dollar or $31.48 per $1,000 unit of L bonds (before deductions), which is next to nothing. This settlement, if approved by the court, would resolve the class action against the company. However, affected investors may have separate legal actions against the brokerages that sold the L bonds to customers.
Public records indicate that hundreds of brokerage firms could have sold this product to their clients, including Emerson Equity LLC, which acted as the managing broker-dealer.
Under FINRA Rules, member firms are responsible for supervising a broker’s activities when the broker is registered with the firm. Therefore, brokerage firms across the country may be liable for investment or other losses their customers suffer. With the bankruptcy settlement offering so little to those affected by the bonds fraud, investors must look for alternative sources of payment for their losses. At Erez Law, we understand the severe losses those who invested in these high-risk bonds have sustained. An experienced GWG bonds lawyer from our firm can represent you in arbitration against the brokerage firms that sold these investments, which is the only real remedy remaining for affected investors. Call us today for a free case review to learn more about your legal options.
Contact Our Firm to Start Your GWG Holdings Lawsuit
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If you have experienced bonds investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation about your investment fraud law case. A knowledgeable investment fraud attorney for GWG Bonds can discuss your case and legal options for pursuing recovery for significant losses caused by GWG investments and the negligent brokerage firms that sold them. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations, and institutions in claims against brokerage firms, banks, and insurance companies on a contingency fee basis.