Investors who bought GWG Holdings, Inc. (“GWGH”) L Bond Units (“L Bonds”) may be entitled to recover losses. Emerson Equity LLC and a network of broker-dealers pitched GWG investment products to retail investors.

GWG Holdings’ revelation of its current inability to raise capital, recurring losses from operations, negative cash flows from operations, and negative implications related to the ongoing U.S. Securities and Exchange Commission (“SEC”) investigation has diminished investors’ expectations of future interest payments, thus reducing GWG Holdings’ value.

Dragged down by the bad news, GWG Holdings’ stock price has plummeted by 51% over the last few months. GWGH closed trading at $5.14 on March 8, 2022. GWGH shares traded as high as $10.51 on November 17, 2021.

Riera Law is investigating potential claims related to investments in GWG Holdings L Bonds. If you purchased L Bonds and have suffered losses, please contact the Securities Attorney of Riera Law for a FREE Consultation by filling out a Contact Form or by calling 305-204-9779. Concerns about possible broker misconduct are serious, and we will aggressively pursue claims to recover your losses.

Series of Disappointing News

On August 1, 2021, GWG Holdings disclosed that it had to restate its financial statements because the financial information in previously filed financial reports were false or misleading. GWG Holdings restated its 2019 financial statements for the year ended December 31, 2019. As a result, investors relied on distorted financial information provided in the GWG’s 2019 financial statements and GWG’s June 2020 Prospectus to predict GWG’s future profitability and evaluate GWG’s value.

GWG Holdings disclosed in November 2021 that it has been the subject of an ongoing SEC investigation since at least October 2020. The SEC has been scrutinizing GWG Holdings’ L Bonds and accounting practices for more than one year. In response to several SEC subpoenas, GWG has turned over records to the SEC. GWG Holdings acknowledged that the SEC’s investigation could have a material adverse effect on its ability to raise capital and the value of its securities.

On January 10, 2022, GWG Holdings, Inc. (“GWGH”), once again decided to suspend the offer and sale of L Bonds. GWG had recently resumed its L Bond offering after they became current with their SEC filing obligations. From April 2021 to December 2022, GWG Holdings had suspended its L Bond offering because of their delay in filing quarterly and annual reports with the SEC.

In February 2022, GWGH’s President and CEO sent a letter to investors informing them that they decided to pause the sale of L Bonds indefinitely. GWG also told investors that they had decided to stop making the monthly L Bonds interest payments or maturity payments it owes investors. To make matters worse, GWG told investors they would let them know if they are able to make these cash payments in the future.

L Bonds are High-Risk Investments

GWG Holdings has sold approximately $1.5 billion L Bonds from January 2018 to January 2022.  GWGH purportedly funded the purchase of life insurance policies in the secondary market through the sales of L Bonds. GWG Holdings promised to make interest payment on the L Bonds that ranged from 5.5% to 8.5% interest based on their maturity term.

L Bonds are corporate bonds and are considered a risky investment. L Bonds are non-traded and non-investment grade bonds, which are also called high-yield or speculative bonds. Investments in L Bonds are illiquid and have a high risk of default. If GWG Holdings defaults, there is a possibility that it will go bankrupt and investors could lose their entire investment.

GWG Holdings Lawsuits

Numerous lawsuits have been filed and regulatory matters have been initiated, alleging that GWG Holdings engaged in wrongdoing.

Investments in the L Bonds were offered and sold through Emerson Equity LLC and a network of broker-dealers who pitched the products to retail investors. Brokers (Financial Advisors) have a legal obligation to inform investors of the risks associated with an alternative investment, such as L Bonds, and to ensure that the investment was consistent with the client’s investment objectives and risk tolerance.

To the extent that the broker failed to abide by any of these duties, the customer may be entitled to a recovery of his or her investment losses.

FREE Consultation | 305-204-9779

Investors who suffered losses from GWG Holdings may have valid claims to recover those losses from the brokerage firms that sold the investments. If you are an investor who has suffered investment losses in GWG Holdings’ L Bond Units, it is imperative that you take action. Riera Law’s securities attorney has represented thousands of victims, and we will aggressively pursue claims to recover your losses.

Riera Law is investigating the sales practices of brokers who sold L Bonds, as well as the GWG Holdings’ investment products brokers recommended to investors. Concerns about possible broker misconduct are serious, and we are committed to fighting on your behalf. Contact Us today for a FREE Consultation. 305-204-9779.