GWG Bankruptcy:
Bond Loss Recovery
Kurta Law is investigating and filing claims related to the sale of GWG L Bonds. Contact our firm to discuss potential options for recovering your investment losses.
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Over $200 Million Recovered
What Are L Bonds?
L bonds are a type of alternative asset. GWG Holdings used investor funds to purchase life insurance policies. The firm purportedly planned to pay investors using life insurance policy payouts. L bonds were speculative investments, meaning that they came with a high level of risk. Brokers should have informed their investors that there was a chance they could lose their entire investment.
How Did L Bondholders Lose Money?
GWG Holdings has filed for chapter 11 bankruptcy. This followed GWG’s failure to make $1.6 billion in payments to L bond investors. GWG Holdings is also the subject of an ongoing SEC investigation. Thousands of investors have potentially lost everything.
Our attorneys believe that GWG Holdings used L bonds to operate a Ponzi-like scheme, using proceeds from the sales of L bonds to make payments to investors. Brokers allegedly promised tempting returns of 5% to 8%. Many L bond investors are retirees, and brokers knew (or should have known) that their customers were not in a position to invest in a risky “junk bond.” Now investors are stuck with these potentially worthless investments, unless they can recover their losses from their brokerage firm.
GWG Bankruptcy: Timeline
In October of 2020, GWG Holdings became the subject of an SEC investigation. The investigation's findings are not yet public. Sales of L bonds began to decline at the end of 2021, and in January of 2022, GWG Holdings failed to make a $10.35 million interest payment to bondholders. They also failed to make over $3 million in principal payments and cited lower sales of L bonds as the reason. (If the investments were generating the 5% to 8% return that many brokers allegedly projected to their investors, the firm should not have had to rely on sales of L bonds to make their payments.)
Trouble continued as GWG Holdings announced that they were pausing the sale of L bonds. GWG Holdings failed to file their SEC Form 10-K in a timely fashion, and their accounting firm announced they would no longer work with GWG.
Following this series of catastrophes, investors discovered that they had nowhere to turn to sell or redeem their bonds. These are illiquid investments and they do not sell on a public exchange—GWG Holdings relied on brokers to sell L bonds directly to investors.
How Much Money Did Investors Lose?
GWG Holdings sold more than $1.6 billion in L Bonds. It is expected that investors will lose hundreds of millions of dollars, at a minimum. In the wake of GWG Holdings’ bankruptcy filing, many investors fear they may lose their entire investment.
How long do I have to recover my losses?
Many GWG L Bond investors have viable claims to recover their losses. All cases are subject to strict time limitations. Once that deadline passes, the right to bring a claim is lost forever. So, if you believe you have a claim, you should contact us today.
How Can Kurta Law Help Me?
Brokers owe their investors due diligence—if they researched GWG’s L bonds, brokers should have known that there was a chance they could lose money. FINRA Rule 2111 requires investors to recommend investments that suit their investors' risk tolerance, liquidity needs, and investing experience. If your broker misled you or simply did not provide adequate information, speak to one of our securities attorneys today.
Your brokerage firm may require you file FINRA arbitration instead of suing. FINRA arbitration is usually faster than a court case, but it can be confusing for investors. Our securities lawyers have decades of experience handling these cases. We will advocate tirelessly on your behalf.
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What Are The Next Steps?
Contact Kurta Law today to figure out the next steps to get your money back. We will guide you through the process of FINRA arbitration and push for a quick resolution.
Meet Our Attorneys
Jonathan Kurta
Robert Van De Veire
Representing Investors Nationwide
Our law firm has represented individual investors in every state and many investors overseas. We are happy to speak with you via phone, email, or 24/7 live chat.