On Friday, February 18, 2022, Silver Law Group and co-counsel filed a class action complaint against GWG Holdings and several of its principals to recover losses suffered by investors who purchased GWG’s “L Bonds”. The Complaint was filed in the United States District Court for the Northern District of Texas and alleges violations of the federal securities laws. Among other things, the Complaint states that:
- GWG’s L Bonds were designed to enrich GWG’s principals “accomplished through Defendants’ false and misleading statements and omissions . . .”
- “The [L Bonds] now lack value on account of GWGH’s inability to service them.”
- “As a result of Defendants’ wrongful acts and omissions, and the steep decline in the value of the L Bonds, Plaintiffs and other Class members have suffered significant losses and damages, which they now seek to recover through this action.”
With The Class Action On File, Silver Law Group Continues Its Investigation Against Financial Advisors
Silver Law Group is continuing to investigate GWG’s sales of “L-Bonds” to investors nationwide. Many investors alleged L Bonds were sold as offering investors higher yields than typical publicly traded bonds and as being backed by bundled portfolios of life insurance policies purchased on the secondary market. Unlike publicly traded securities, L Bonds are illiquid, speculative alternative investments that do not have a public market. L Bonds were sold by a network of broker-dealers across the United States.
On January 27, 2022, the Wall Street Journal quoted Scott Silver highlighting that “many of our clients are retail investors who bought the bonds after hearing the products were safe and would offer a comfortable income stream for their retirement but that they were shocked to learn that their money was used to pay old investors while the company was under SEC investigation.”
GWG’s L Bonds
GWG Holdings is a Dallas-based financial services firm that offers a variety of services including life insurance and alternative investments. GWG sold billions of dollars worth of L Bonds over the past several years, and investors are now concerned about the status of these investments and the potential loss of principal.
Generally speaking, L Bonds are a relatively new financial product that purportedly offers higher yields than typical publicly traded, fixed income bonds. The bonds are supposed to help finance the purchase of the policies but offer significant risk to the investors.
According to a prospectus published by GWG for the offering of $2 billion of L Bonds, the bonds were sold with varying maturity terms ranging from 2 years to 7 years, with interest rates ranging from 5.50% to 8.50%. These bonds have significant risk and are not like traditional corporate bonds and other conservative investments.
Are You An L Bonds Investor? Contact Silver Law Group To Discuss Your Options
Investors may have potential claims against the company, the broker-dealers and financial advisors that sold these investments, as well as potential other liable third parties. The current lawsuit against GWG seeks class-action certification. Investors may also choose to pursue individual FINRA arbitration claims against their brokerage firm or financial advisors.
If you or someone you know invested in GWG-offered L Bonds, contact Silver Law Group for a confidential consultation at [email protected] or toll free at (800) 975-4345. Managing Partner Scott Silver is the chairman of the Securities and Financial Fraud Group of the American Association of Justice and represents investors nationwide in securities investment fraud cases. We often work on a contingency fee basis, meaning you don’t owe us anything unless and until we recover for you.