Investment fraud lawyers for GWG Holdings are investigating claims from investors who lost substantial sums of money in the company’s L bonds. These bonds were backed by life insurance policies and sold through a number of different broker-dealers. Many of these brokers failed to perform proper due diligence and accurately disclose the risks associated with these investments. Investors may be entitled to recover their losses from the brokerage firm that sold them the bonds.
If you have questions about an investment you made with a GWG Holdings L Bond, contact the investment fraud attorneys at Silver Law Group today to discuss your potential recovery options. The firm is also investigating claims against the broker-dealers who encouraged their clients to purchase these high-risk securities. Broker-dealers must follow federal laws that require them to ensure that their customers understand an investment, that they conduct sufficient due diligence, and that all material risks are disclosed before recommending it. Failure to do so may lead to claims for breach of fiduciary duty and other damages.
A common method of investment fraud involves companies that create complex financial products with the intention of generating large returns for their investors. These products may be advertised as safe, low risk investments, and many people are pushed to invest their hard earned savings by fast-talking salespeople who appear to have good credentials. Some of these products are so complicated that even the brokers who sell them do not fully understand how they work. Others are easier to understand but their viability and the accompanying risks are misrepresented or downplayed.
The GWG Holdings bankruptcy in 2022 left L Bond investors with an illiquid investment and significant losses. The company was unable to maintain cash flow from its operations and faced serious credit problems from its debt obligations, a reverse merger transaction with Beneficient Group and the evaluation of fair value on life insurance policies. In addition, GWG Holdings had a complicated corporate structure that allowed its principals to “invest” their own personal business ventures without disclosing these investments to investors.
When investing, always be cautious of any investment that offers guarantees, especially if the investment is unregistered. All investments involve some degree of risk, but when an investment promises a high rate of return over the course of a year or more, it should raise red flags. Also, be wary of any investment that requires a large initial deposit or has an excessively long lock-up period.
If you have any questions about an investment you made with GWG, contact the experienced investment fraud attorneys at Silver Law Group. Our team is available to review your case and provide a free consultation. We represent clients in FINRA arbitrations and securities litigation throughout the country. In most cases, we can resolve your claim more quickly and efficiently than a lawsuit and with less expense to you. We handle a wide range of investment fraud matters, including EB-5 Immigrant Investor Program fraud, hedge fund fraud, private equity fraud, junk bond fraud, oil and gas investment fraud, promissory note fraud, preferred shares of stock fraud, and ponzi schemes fraud.