Articles Tagged with GWG Holdings

Texas-Based GWG Holdings and its Directors Are Defendants in Class-Action Lawsuit

Two investors seeking class-action status have filed a lawsuit against GWG Holdings, Inc. (NASDAQ: GWGH). They are accusing the Texas-based alternative asset manager and investor of life settlements, as well as its directors, of making misrepresentations and omissions in offering documents of its L Bonds. 

GWGH sold more than $350M of these high-yield bonds between August 2020 and April 2021, when sales were discontinued due to liquidity problems. The company also failed to submit its 2020 yearly report in a timely manner. In February 2022, GWG Holdings defaulted on $3.25M of principal payments plus $10.35M of interest owed to L Bond investors. 

Firm Owes Millions to Investors of GWG High-Yield L Bonds  

Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyers.com) is looking into claims of losses by customers who purchased GWG L Bonds at the recommendation of Emerson Equity broker Tony Barouti. 

Unfortunately, it appears that Barouti, who is based out of Los Angeles, may have unsuitably sold L Bonds to several investors, including retirees and older retail customers.

Texas-Based Alternative Asset Firm Sends Letter About Failed Payments on Valentine’s Day 

On February 14, 2022, GWG Holdings (GWGH) sent a letter to shareholders letting them know that it defaulted on the $3.25M in principal payments plus $10.35M in interest payments owed to L Bond investors. 

The Texas-based alternative asset firm had a 30-day grace period to issue the payments beginning on January 15, 2022. GWG Holdings also stated that redemption requests would continue to be deferred. Now, L Bond investors are left with high-yield junk bonds that are not paying them the income promised. These are alternative investments that cannot be redeemed or sold.

Deadline for GWG Holdings to Pay L Bond Investors $13.6M is Fast Approaching 

Our investment fraud lawyers are speaking with investors who suffered losses in GWG L Bonds. These private placement, high-yield junk bonds were issued by GWG Holdings, Inc. (GWGH) and may have been marketed and sold by many broker-dealers, including Aegis Capital, Emerson Equity, and others.  

GWG L Bonds have been available since 2012. However, their sales have been put on “pause” after being reinstated in December 2021 after a suspension of several months. Formerly called Renewable Secured Debentures, it was renamed L Bonds in 2015. GWG Holdings launched a new offering made up of its secured debt known as the Liquidity Bond 2020.  

Hundreds of Broker-Dealers May Have Sold Up to $2B of High-Yield Junk Bonds 

InvestmentNews reports that according to an industry insider, GWG Holdings may have issued up to $2B of high-yield junk bonds in recent years. While Emerson Equity is the managing broker-dealer for the GWG Issuer, there may have been hundreds of other broker-dealers that also sold L-Bonds to investors. 

In a January 15, 2022 filing with the US Securities and Exchange Commission (SEC), GWG disclosed that it hasn’t been able to issue $13.6M in principal payments and interest that it owes to L Bond investors. The Dallas-based alternative asset manager has a 30-day grace period to complete the payments or risk default. 

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