SSEK Law Firm Continues Investigation of GWG Holdings Seeking Chapter 11 Bankruptcy Protection

Bond issuer L says SEC probe contributed to its demise

DALLAS, April 26, 2022 /PRNewswire/ — GWG Holdings, Inc. (GWGH) voluntarily filed for Chapter 11 bankruptcy protection. This decision was expected in the wake of regulatory and financial difficulties plaguing the dallasalternative company based.

The bankruptcy of GWG Holdings is bad news for investors, many of whom are retail clients, including senior investors and retirees. In February 2022the company that sold $1.6 billion in settlement-backed bonds through independent brokerage firms, had defaulted on $13.6M in principal and interest payments it owed investors in its Series L Bond.

In its bankruptcy filing, GWG Holdings said the SEC’s investigation of brokerage firms for selling L-Bonds to their clients contributed to the collapse of the alternative asset firm. Some 145 broker-dealers, including the managing brokerage firm Emerson Equitysold L bonds to investors.

GWG said that after resuming the sale of these high yield bonds in December 2021the SEC began sending subpoenas to brokerage firms that were selling or considering selling GWG L bonds. These firms then became reluctant to sell financial instruments to their clients, resulting in very low sales.

GWG Holdings said all of this affects its ability to “access capital markets”. The company again stopped selling L bonds in January 2022.

Our securities attorneys represent investors in FINRA arbitration against brokerage firms that improperly sold them these junk bonds and misrepresented the high risks involved.

Suspension of L-bond sales caused problems for investors and GWG

GWG Holdings currently has approximately $2 billion of total liabilities and more $3.4 billion assets from secondary life insurance policies and interests in two unaffiliated entities. The alternative assets company’s merger with Beneficent Co. Group, LP, a financial services company that lends to those with illiquid alternative assets, has only contributed to its problems.

In 2018, GWG stopped buying life insurance policies and started selling L bonds backed by beneficial ownership units. The latter used the proceeds of these sales to invest in alternative assets. Investors say they were never fully informed of these developments.


If you have purchased GWG L Bonds within the last few years from Emerson Equity or another brokerage firm, please contact our investment attorneys GWG Holdings today for your free consultation.

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SOURCE Shepherd Smith Edwards & Kantas LLP

Anne G. Cash