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GWG Holdings Investigation | L Bonds Losses

“GWG Holdings Inc., an alternative asset manager that issued a series of high-yield bonds known as L Bonds, has severely stumbled of late, most recently stating it had missed $13.6 million in combined interest and principal payments for its L Bonds series.” (Investment News, Jan 2022)

 

From November 2021 to March 2022, GWG Holdings’ stock price went from $10.51 to $5.14. In January 2022, the company missed payments for its GWG Holdings L Bond Series in the amount of $13.6 million. In the following month, GWG’s CEO issued a letter in which he stated “While we continue this process, GWGH paused L Bond sales and will not make monthly interest and maturity payments on its L Bonds, or dividends on the Redeemable Preferred Stock and Series 2 Redeemable Preferred Stock, while continuing to defer requests for redemptions.” After that, a spokesperson for the company declined to comment when InvestmentNews’ Bruce Kelly asked if the bonds were in default.

 

Brokers, financial advisors, and brokerage firms who recommended GWG Holdings L Bonds knew or should have known of its risks and issues. If you invested in GWG Holdings, Contact Peiffer Wolf for a FREE CONSULTATION by calling 585-310-5140 or by filling out a Contact Form on this website.

GWG Investigation | Did you invest in GWG L Bonds?

GWG L Bonds were created and issued by GWG Holdings.

 

“Highly speculative, the L bond sought to provide a high yield for the bondholder in exchange for the risk that insurance policy premiums or benefits may not be paid. [They] were highly illiquid—there was no way for bondholders to resell them, except back to GWG Holdings at a redemption fee.” (Investopedia)

 

Illiquid investments mean investors may be stuck in the investment and unable to access their money. Moreover, many illiquid investments cannot be freely sold in the marketplace.  All too often, investors trying to exit or access their money are faced with two bad options: sell the shares directly back to the sponsor at a heavily discounted price or sell the shares for pennies on the dollar through the limited secondary markets.

 

However, as revealed by InvestmentNews, L Bonds issued by GWG Holdings could have been deceptively perceived as very attractive to investors: “GWG could have issued as much as $2 billion of high-yield bonds over the past several years; the securities are 7-year bonds with yields of 8.5%, making them particularly attractive to investors in the recent low-interest-rate environment.”

 

If you invested in GWG Holdings, Contact Peiffer Wolf for a FREE CONSULTATION by calling 585-310-5140 or by filling out a Contact Form on this website.

GWG Holdings Investigation | What happened?

 

August 2021: GWG Holdings discloses that it had to restate its financial statements because the financial information in previously filed financial reports were false or misleading, meaning that investors relied on distorted financial information to assess profitability and evaluate GWG’s value.

 

November 2021: GWG Holdings discloses that it has been the subject of an ongoing SEC investigation for over a year, which could have a material adverse effect on its ability to raise capital and the value of its securities.

 

January 2022: GWG Holdings reveals it missed $13.6 million in combined interest and principal payments for its L Bonds series.

 

February 2022:  GWG’s CEO issues a letter to investors informing them that “GWGH paused L Bond sales and will not make monthly interest and maturity payments on its L Bonds”.

 

If GWG Holdings defaults, it could go bankrupt. If that happens, investors who should have never been offered L Bonds by their brokers could lose their investments.

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GWG Investigation | FREE Consultation | 585-310-5140 

 

Brokers, financial advisors, and brokerage firms who recommended GWG Holdings L Bonds knew or should have known of its risks and issues. If you invested in GWG Holdings, Contact Peiffer Wolf for a FREE CONSULTATION by calling 585-310-5140 or by filling out a Contact Form on this website.

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