GWG’s L Bonds were very risky investments that the company should have only recommended to sophisticated institutional investors that had a high tolerance for risk.
Many of the L Bond investors were retirees looking for a stable and secure income source. The L Bonds were totally unsuitable for retirees with a more conservative investment objective who were interested in their principal being kept safe. Unfortunately, these investors were sold a risky, illiquid investment by brokers and their firms who failed in due diligence before recommending these L Bonds.
What An Investor Can Do to Recover GWG Losses
While you may recover something from GWG’s bankruptcy, it’s a long wait and a long shot that most of the principal will be recovered. The company’s Chapter 11 is a reorganization, and it may be many months before they release any information about what happens next.
Selling your L Bonds is probably not an option at this point. Your contract states that you can only sell them back to the company itself. And if you could, you’d be forced to pay them a 6% “redemption fee,” which is also required in your contract. At this time, GWG Holdings does not appear to be offering any redemptions for any investors.
In the meantime, you should speak with a securities law attorney to discuss your case before proceeding.
Brokers and their firms sold these L Bonds to investors knowing that they were an “alternative investment,” illiquid private placements, not publicly traded, and highly risky. Yet they still took the approach that L Bonds were a conservative investment with a guaranteed return of principal plus interest.
FINRA Arbitration For Recovering GWG Losses
GWG did not sell these bonds directly. Emerson Equity, LLC, was the managing broker for GWG. Many other brokerages across the US may have sold these bonds.
FINRA member firms are required to supervise their brokers’ activities while they are registered with them. Because your broker and/or brokerage firm was the reason you bought into L Bonds, they can be held liable for at least some of your losses. FINRA arbitration is one way you can try to recover these losses.
Your agreement with the brokerage firm requires that you settle any disputes through binding arbitration using FINRA. You also have the right to legal representation in arbitration. We recommend filing an arbitration claim as soon as you can understand your rights and the best way to proceed.
If you decide to initiate a FINRA arbitration claim or file a class action suit, contact Silver Law Group first. We recommend meeting with us before starting any legal actions. Our securities arbitration attorneys will discuss your legal options and help you decide the best way forward to begin recovering your investment funds.
Did You Invest With GWG Holdings?
Silver Law Group represents investors in securities and investment fraud cases. Our lawyers are admitted to practice in New York and Florida and represent investors nationwide to help recover investment losses due to stockbroker misconduct. If you have any questions about how your account has been handled, call to speak with an experienced securities attorney. Most cases are handled on a contingent fee basis, meaning that you won’t owe us until we recover your money for you. Contact us today at (800) 975-4345 and let us know how we can help.