GWG Holdings, Inc.

GWG Holdings, Inc. (NASDAQ: GWGH), a Dallas, Texas-based alternative asset manager, has sold $1.6B of life settlement-backed bonds backed through a network of US-based brokerage firms. The company came under public scrutiny in early 2022 after it defaulted on $3.25M in principal payments and $10.35M in interest that was due to L Bond investors. As expected, GWG Holdings, Inc. filed for Chapter 11 bankruptcy protection on April 20, 2022. The company made the announcement on their website.

Managing brokerage firm Emerson Equity and many other broker-dealers sold these high-yield bonds to customers who are now grappling with significant losses. Center Street Securities, Centaurus Capital, and Aegis Capital are a few of these broker-dealers.

Many investors were unsuitably sold L Bonds or never fully apprised of the risks. Visit GWG Holdings L Bonds for more information about this high-risk, illiquid product.

Our GWG L Bond attorneys are representing investors whose broker-dealers marketed and sold these illiquid products to them. Contact us today at Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyers.com) so that we can help you explore your legal options.

GWG announces on their website that they have voluntarily filed for bankruptcy in the U.S. Bankruptcy Court for the Southern District of Texas.

The Listing Qualifications Department of the Nasdaq Stock Market notified GWG Holdings that it was not in compliance with NASDAQ Listing Rule 5250(c)(1). This was because the alternative asset firm had yet to submit its Annual Report on Form 10-K for the fiscal year that concluded on December 31, 2021.

GWG disclosed that its latest yearly filing to the US Securities and Exchange Commission (SEC) would not happen in a timely manner.

GWG defaulted on the $3.25M in principal payments and $10.35M in interest it owed investors.

GWG Holdings sent a letter to L Bond investors letting them know that, once again, the sale of these high-yield bonds was being "paused" and redemption requests would be deferred. The company admitted that the decreased sale of L Bonds had caused a shortage in cash and that payments it owed investors (which it would default on the following month) were late.

During this month, GWG also announced the hiring of Mayer Brown LLP as its restructuring counsel, FTI Consulting as its restructuring financial advisor, and PJT Partners as an investment banker to help secure financing.

GWG Holdings reinstated L Bond sales after voluntarily suspending the offerings in April 2021. Also, independent auditor Grant Thornton resigned. This was just a few months after the alternative asset firm acknowledged that its Annual and Quarterly reports for 2019 and 2020 were unreliable. The company promised to provide amended reports, which were not yet submitted by early April 2022.

GWG disclosed that it had received a subpoena from the SEC's Division of Enforcement the year before, ordering that it produce certain documents and notifying the alternative asset firm that it had become the focus of a non-public, fact-finding investigation.

GWG Holdings, Inc. has undergone a massive drop in share price. For example, in November 2021, GWG's stock price was $10.55/share. By the afternoon of April 7, 2022, its price on NASDAQ was $1.95/share. GWG sells alternative investment products to fund its life insurance asset portfolio.

Recent balance sheets have shown $794.7M in tangible assets, $67.7M in cash, and $226.1M in investments in alternative assets. However, the company also has $327.7M in outstanding senior credit facilities and over $1.55B in outstanding L Bonds and other debt.

This outstanding debt to GWG Bondholders had gone up by 560% over four years, during which time the yearly cash flow required to pay for ongoing policy premiums was more than $500M yearly. Yet GWG had just a fraction of that in cash.

While Emerson Equity is the managing broker-dealer for GWG L Bonds, it has partnered with many other firms for a cut of the sales commissions. This has led to investors paying around 7-8% to Emerson and whichever other firm.

Unfortunately, these brokers and investment advisors may have made misrepresentations and omissions when recommending this high-yield bond. Some investors, including retirees and other retail customers, should never have been sold L Bonds.

Our savvy GWG L Bond lawyers offer free, no-obligation case consultations to those who have suffered losses in this alternative investment. SSEK Law Firm represents clients in Financial Industry Regulatory Authority (FINRA) arbitration.

All too often, investors lose money because of broker misconduct or negligence. Our experienced securities law firm is here to fight for our clients' financial recovery. Call our GWG Holdings L Bond attorneys at (800) 259-9010 today or contact us online.