If you or a loved one invested in GWG Holdings’ L Bonds and have been missing interest payments, you may be entitled to recover investment losses through FINRA arbitration. The attorneys at the White Law Group are pursuing a FINRA arbitration claim on behalf of investors who lost money in these high-risk bonds. Our firm has been receiving calls from many investors who were sold these investments by a broker or brokerage firm. Brokers and brokerage firms are required to perform due diligence on all investments before recommending them to clients. They must ensure that these investments are suitable for each individual client’s age, investment experience, net worth, risk tolerance, and investment objectives. If they fail to adequately evaluate these investments, they can be held liable for unsuitable recommendations and losses in a FINRA dispute resolution forum.
The alleged fraud in the GWG Holdings fraud attorneys L Bonds began when company founder Brad Heppner and others, working with a network of regional broker-dealers, misrepresented these securities’ risks to retail investors. Investors were promised that they would be receiving stable, safe income-producing investments, when in reality these securities were speculative and highly volatile. Despite the warning signs, many investors trusted their financial advisers and brokerage firms to perform proper due diligence and make suitable investment recommendations.
During bankruptcy proceedings, it has come to light that Heppner and other GWG insiders used the company to steal from investors. Heppner transferred millions of dollars in L Bonds to startup companies that he controlled, and used these new assets to make payments to some bondholders while diverting money away from the rest of the business. The bankruptcy court claims that Heppner’s scheme amounted to a “fraudulent Ponzi scheme.” Heppner and his partners also used the funds to purchase other assets, including a stake in a private equity fund that later filed for Chapter 11 protection.
In late January, GWG missed $13.6 million in interest payments to investors on its L Bond series. The company filed for Chapter 11 bankruptcy protection on April 20, 2022. In the bankruptcy filing, GWG cited unaudited financial statements that showed that the company had more than $2 billion in total liabilities, including almost $1.3 billion in L Bonds.
According to a statement released by GWG, the company had hoped to pursue rescue financing, but this was unsuccessful. The bankruptcy court is currently examining GWG’s business plans and the company’s financial records.
The official committee of creditors of the GWG Holdings, Inc bankruptcy filed a legal complaint on February 1, 2023 against a number of individuals and companies related to or affiliated with Heppner, transferees of certain fraudulent transfers, and key broker-dealers that marketed the GWG Series L Bonds. The Bondholder Committee is seeking compensatory and punitive damages from these parties. If you invested in the GWG Series L Bonds, it is critical to contact our office right away to protect your rights. Our experienced attorneys can review your claims and provide you with a free case consultation.