In January, 2022, GWG Holdings defaulted on $13.6 million in interest and principal payments on L Bonds. In April it owed $1.3 billion to thousands of individual investors as it filed for bankruptcy. The ongoing investigations into GWG Holdings Inc. continue to suggest that the company’s sale of L Bonds were flawed and fraudulent.

Now, (Dec 2022), the official Committee of Bondholders of GWG Holdings Inc. has filed a legal motion in GWG’s chapter 11 case[1] in support of L Bond investors and listing several serious allegations against GWG and Brad Heppner, chairman of GWG at the time. These accusations were levied after the committee completed its own investigation that included interviews, depositions, and hundreds of thousands of pages of documents and financial analysis. The filing includes the following, revealing statements:

The Official Committee of Bondholders (the “Committee”) of GWG Holdings, Inc. “brings this Motion for standing to prosecute valuable estate causes of action arising from a multiyear long fraud orchestrated by Brad Heppner to enrich himself and associated corporate entities by plundering the Debtors. The resulting harm from this fraud has fallen almost entirely on the shoulders of the L Bondholders—approximately 27,000 primarily retail investors who are collectively owed approximately $1.6 billion, with each individual L Bondholder owning on average less than $45,000 worth of L Bonds.

“Through no fault of their own, many of these L Bondholders face financial ruin because GWG Holdings, Inc., through a group of select broker-dealers, aggressively and misleadingly marketed and sold L Bonds even after it became clear that its business was failing and the only way to repay those bondholders was to continue to sell yet more L Bonds to existing and additional retail investors.

“Put simply, GWG was a classic Ponzi scheme.”

If you lost money on GWG L Bonds, it may take years for legal action to take its course through the SEC and federal courts and there is no guarantee that bondholders will receive more than a fraction of their investments once settled.

You may, instead, be able to recoup some of your losses through FINRA arbitration. This is the action that holds those “select broker-dealers” who “aggressively and misleadingly marketed and sold L Bonds” accountable. If live in Missouri or Kansas, and your broker recommended a GWG L-Bond that you lost money on, you may have a case against your broker.

Rose Law is already representing clients of Kansas City based broker Advanced Financial Solutions, and is actively investigating Moloney Securities. Across the country, investors are winning their cases against brokers who recommended GWG L Bonds against fiduciary trust. Contact Us today to find out if you have a claim.

[1] Motion of the Official Committee of Bondholders of GWG Holdings Inc., et al., for Standing to Prosecute Causes of Action on Behalf of the Debtors’ Estates Filed by Interested Party Official Committee of Bondholders of GWG Holdings, Inc., et al.