Many investors who invested in GWG Holdings “L Bonds” or other debentures are wondering how to recover their investments. It seems highly unlikely that these individuals will receive significant recovery through a bankruptcy proceeding. The company is currently in Chapter 11 and has massive debts. The company’s assets are also held by other entities. It may be years before the L Bonds are repaid or returned to investors. In the meantime, there are legal avenues for these investors to pursue.
Investors who purchased the risky and speculative GWG L Bonds can file FINRA arbitration claims against the broker-dealers and advisors that sold them. These claims can be filed against the brokerage firms for failing to conduct due diligence on the investment, failing to disclose material facts about the company, or for otherwise mishandling these securities.
A class action lawsuit is another way for GWG how to recover GWG Holdings investments investors to seek recovery of their losses. However, these lawsuits can be complex and time-consuming to resolve. Furthermore, empirical evidence has shown that individual FINRA arbitration claims yield a higher rate of recovery for investors than do class actions.
As GWG was teetering on the edge of bankruptcy, its founder and CEO Brad Heppner started selling some of his own bonds to investors in order to boost cash flow. Heppner redirected some of the proceeds from these sales to his personal accounts, and used them to pay for various expenses. This was a clear red flag that GWG was operating like a Ponzi scheme and could not repay its investors.
In addition, Heppner was reportedly secretly using some of the proceeds from the sales of the L Bonds to buy more life insurance policies that were then transferred to Beneficient. This is a violation of federal securities law and is a form of insider trading. In the meantime, the bankruptcy process has been incredibly slow and difficult for GWG to keep its creditors apprised of the status of the company’s financial situation.
It is important for investors to act quickly to seek a recovery of their GWG Holdings investments. The White Group’s attorneys are ready to assist investors in pursuing their legal remedies. Please contact us today for a free consultation. Our firm has recovered over $350 million in FINRA arbitrations and other securities litigation matters for investors nationwide. We have offices located in California, Florida, and New York. You can reach us by phone or online. We look forward to hearing from you. The attorneys at the White Group are experienced in all aspects of securities arbitration and litigation, including the defense of class actions. We have handled hundreds of cases in both state and federal courts. We are dedicated to our clients and fight for their rights in every case. We represent clients across the country in all types of complex securities and business litigation. We have successfully recovered millions of dollars in damages on behalf of our clients. We handle cases involving securities fraud, breach of fiduciary duty, negligence, fraud in the inducement, breach of contract, and violations of consumer protection laws.