Investors in securities sold by GWG Holdings (“GWGH”), including L Bonds, preferred stock, and common stock listed on Nasdaq under the ticker symbol GWGH, may have legal claims, including possible claims if their investment was recommended by a financial advisor who lacked a reasonable basis for the recommendation, or if the nature of the investment was misrepresented by the stockbroker or financial advisor.
GWGH filed for federal Chapter 11 bankruptcy proceedings in Houston, Texas on April 20, 2022, blaming its financial dire straits on an inability to raise capital. The bankruptcy petition is accessible here 22.4.20 bk petition. In a bankruptcy court filing, GWG cited the Securities and Exchange Commission’s questioning of broker-dealers that sold more than $1.6 billion of its life-settlement backed bonds as a significant reason for the company’s collapse, which led to GWGH’s default on $13.6 million in payments due to in January. As GWGH stated in a court filing: “The SEC’s investigation, particularly its focus on how the bonds were sold by selling group firms, has had the effect of significantly impacting the company’s ability to access the capital market… .” “As a result, a number of broker firms indicated that they would not resume sale of the bonds until further notice due to concerns of getting involved further in the SEC’s investigation,” according to the GWGH declaration filed in bankruptcy court.
According to GWG’s website, Emerson Equity, a San Mateo, California-based broker-dealer that primarily sells private placements, is the managing broker-dealer for the GWG issuer. GWGH L Bonds were reportedly sold through network of 145 “member firms and registered investment advisors” according to filings by GWGH in bankruptcy court.