Following the collapse of GWG Holdings, investors holding illiquid L-Bonds find themselves with significant principal losses. With over $1.3 billion in L-Bonds sold, investors are now compelled to seek relief from the broker-dealers and financial advisors who promoted this investment.
Speaking in an Investment News article, Silver Law Group’s managing partner Scott Silver said, “The question is why would anyone recommend this product to a client? This case is not about the customer; it’s about the flawed product. Arbitrators appear shocked to hear billions of dollars of this stuff is sold.”
In its 2023 FINRA arbitration, Silver Law Group successfully obtained more than $280,000 on behalf of two Boston and Massachusetts investors. Ryan Schwamm, an attorney at Silver Law Group stated, “we are glad we were able to help our clients recover the money they need in retirement and to support their families’ healthcare needs.”
Silver Law Group Will Advocate For Your Claim
Silver Law Group has represented many investors in claims to recover their GWG L-Bonds losses. These claims primarily focus on the lack of due diligence into GWG, misrepresentations regarding the risk of the product and overconcentration in the investor’s portfolio.
Breach of Fiduciary Duty
Broker-dealers and financial advisors have a duty to act in their client’s best interest, which includes understanding the invest products they recommend. Any broker or financial advisor who sold GWG’s L-Bonds may have breached this duty due to the high risks involved. As noted by FINRA Arbitrator Richard Kent Mahrle, L-Bonds were “not a suitable investment for the [client], or perhaps anyone. “
Negligence and Negligent Misrepresentation
Broker-dealers and financial advisors have a duty to ensure their clients are fully informed about their investments and associated risks. Failure to properly explain the risks of L-Bonds could cause broker-dealers and financial advisors to be liable for negligence and negligent misrepresentations. Whether brokerage firms were aware of the risks or not, any firm that conducted their due diligence and properly investigated L-bonds would have recognized that “GWG bonds are not suitable for anybody,” as highlighted by Scott Silver.
Failure to Supervise
Individual brokers may bear liability, but brokerage firms can also be held accountable. Brokerage firms are legally obligated to supervise their brokers, potentially making them liable for agent misconduct. Firms must ensure their brokers are well-versed in recommended investments and monitor accounts for red flags. Neglecting these responsibilities could expose the brokerage firm to liability.
Did You Invest In GWG L Bonds?
If you have suffered investment loss due to GWG’s L-Bonds or because of stockbroker misconduct, please reach out to us today so our team of securities experts can help you. Silver Law Group represents investors in a wide range of securities and investment fraud cases. Our dedicated team of investor advocates is here to support you through this process. Most cases are handled on a contingent fee basis, meaning you pay nothing until we recover your money. Contact us today at (800) 975-4345 and let us know how we can assist you.