If you invested in GWG Holdings L Bonds, it is important to understand that you may have several different options for investment recovery. Investing in the bonds, which were based on life insurance policies, was recommended by many financial advisors and brokerage firms to novice retail investors. The company marketed the investments as safe, low-risk alternatives to stock market investment. Currently, the company is in Chapter 11 bankruptcy and it is unclear whether or not investors will receive their principal back. However, you might be able to recover some or all of your losses by filing a FINRA arbitration claim against the brokerage firm that sold the bonds.
L Bonds were illiquid investments, meaning that they did not have a secondary public market and could only be redeemed by GWG Holdings. Investors in the bonds were unable to sell the investments to anyone else and were also charged a redemption fee by GWG for redeeming their investment. If a brokerage firm recommended the purchase of L Bonds to investors, they should have disclosed that the investment was highly speculative and that there was a risk of losing the entire principal amount of their investment.
As a result of their inability to sell the bonds and a slew of other issues, the Dallas-based financial services company filed for Chapter 11 bankruptcy protection in 2021. As a part of the bankruptcy plan, the company has proposed to reimburse L Bondholders for up to 100% of what they are owed. However, this recovery is contingent on the value of GWG’s remaining assets, such as its interests in Beneficient and other holdings.
In a lawsuit, the company’s investors allege that the company’s chairman, Brad Heppner, used GWG Holdings to enrich himself by diverting investor funds to his personal business interests. The investors argue that the company inflated its own profitability projections by omitting key costs and that Heppner misappropriated millions of dollars from the firm. Ultimately, the company collapsed, and it is unclear how much of the money will be returned to investors.
While a class action lawsuit may not be enough to recover your lost investment, you should speak with an attorney to explore your legal options. The experienced financial professionals at Iorio Altamirano LLP are available to evaluate your case. We encourage you to contact us to discuss your potential claims and the available GWG Holdings investment recovery options.
Our firm can assist you in filing a FINRA arbitration claim against your financial advisor or brokerage firm for negligence and breach of fiduciary duties in connection with the sale of the GWG Holdings L Bonds. Our firm represents individual investors throughout the country and is committed to helping investors get the financial relief they deserve. Contact us today to schedule a free consultation. You may be entitled to compensation for your losses. FINRA Arbitration Claims Against Investment Advisors for Selling GWG Holdings L Bonds – The Iorio Altamirano Law Firm. All Rights Reserved.