Written by The White Law Group• April 15, 2025• 2:30 am• Blog, Investment Loss Recovery

GWG Holdings Lawsuits: GWG L Bonds Update

GWG Holdings (GWGH) Update - GWG Life “L Bonds”, featured by top securities fraud attorneys, The White Law Group

DOJ and SEC File Charges Against GWG Holdings Executives – April 2025 Update

Have you suffered investment losses in GWG L Bonds? The White Law Group continues to file securities claims against broker dealers who may have improperly recommended GWG Holdings offerings to investors. These lawsuits are alleging claims for violation of common law fraud, breach of fiduciary duty, negligence, and negligent supervision. The claims further allege that the brokerage firms failed to perform the necessary due diligence on these investments prior to recommending them to these particular investors.

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GWG Holdings Inc. (GWGH) financed its portfolio of life insurance assets through the sale of alternative investment products, according to its website. Although these products are touted as offering potentially higher yields than other investment assets that are correlated with the traditional stock and bond markets, they may come at a much greater risk to investors.

What Happened to GWG Holdings? Bankruptcy Case Update

In April 2025, the Department of Justice and the Securities and Exchange Commission each reportedly filed charges against former executives of GWG Holdings, including co-founder, his brother, and former GWG chief financial officer. The criminal indictment accuses them of defrauding GWG investors of approximately $43 million through a complex scheme involving a separate company they controlled, called Beneficient.

SEC Lawsuit against GWG Holdings

According to the SEC complaint, the defendants allegedly misled investors about how GWG used investor funds and concealed significant conflicts of interest related to Beneficient. The charges allege they diverted tens of millions of dollars from GWG to Beneficient and then to themselves, even as GWG spiraled into financial distress. Prosecutors allege that Beneficient was falsely portrayed as a profitable company when in fact it never generated sufficient revenue to sustain operations or repay investors.

These latest charges may bolster claims by GWG investors who allege that they were misled or sold unsuitable investments in L Bonds and other GWG offerings. Brokerage firms who recommended GWG’s speculative and illiquid investments to conservative or unsophisticated investors may face continued scrutiny for inadequate due diligence, misrepresentations, and failure to disclose critical information.

GWG Holdings Files Chapter 11 Bankruptcy Protection

April 2022– According to a company press release on April 20,

2022, GWG Holdings, Inc. filed for Chapter 11 bankruptcy protection. This comes after the company reported in a new filing on April 1, that it would not be able to file its Annual Report on Form 10-K for the year ended December 31, 2021. Apparently, its independent registered public accounting firm quit in January. The company has missed numerous filing deadlines in the past.

What is an L Bond?

An L bond is a complex investment product that attempts to provide a high yield for a lender in exchange for bearing the risk that an insurance policy premium or benefits may not be paid. An L bond is an unrated life insurance bond that is used to finance the purchase and premium payments of life insurance settlement contracts purchased in the secondary market.

L Bonds were publicly offered and sold on a continuous basis in 2014, 2017 and again in 2020 for a total of $4 billion in principal. The most recent offering will reportedly run on a continuous basis through June 2023, according to the prospectus.

The GWG L Bond prospectus notes, “An investment in the L Bonds involves significant risks, including the risk of losing your entire investment, and may be considered speculative.”

GWG L bonds are illiquid investments, and the shareholders cannot sell them on the secondary market. Shareholders must wait until the bonds mature to redeem the principal amount and they cannot redeem the bond before the maturity date or the death or disability of the original policyholder. According to its prospectus, if GWG agrees to redeem the bond for any other reason, the bondholder will be charged a penalty of 6%.

Class Action vs. Individual FINRA Arbitration Lawsuit

People often wonder whether a large class action lawsuit is a better litigation option for them than an individual FINRA arbitration case. The answer depends on a number of factors but typically if the loss sustained is large (say larger than $100,000) an individual arbitration claim is likely a better option. Class actions as a recovery option are more appropriate for grouping large numbers of individuals who have small claims – too small to generally pursue individually.

GWG Holdings Lawsuits

To learn more about the White Law Group’s FINRA claims involving GWG L Bonds please see the following:

Arete Wealth Management Claim
G.A. Repple & Co. Claim
Emerson Equity Claim
Westpark Capital Claim

Broker dealers are required to perform adequate due diligence on any investment they recommend and to ensure that all recommendations are suitable for the investor. Firms that fail to do so, may be held responsible for any losses in a FINRA arbitration claim.

Frequently Asked Questions about GWG L Bonds

1. What is the status of GWG Holdings now?
As of August 2024, GWG Holdings has ceased operations. The U.S. Bankruptcy Court confirmed the company’s reorganization plan, and all GWG-issued securities — including L Bonds, preferred stock, and common stock — have been cancelled. Investors have received interests in the GWG Wind Down Trust, a Texas-based liquidating trust formed to wrap up the company’s affairs and attempt to monetize any remaining non-litigation assets.

2. Are GWG L Bonds worth anything now?
GWG L Bonds no longer hold face value, as they were cancelled during bankruptcy. Investors were issued interests in the GWG Wind Down Trust, which may provide future distributions if remaining assets can be monetized. However, there is no guarantee that investors will recover any significant portion of their original investment.

3. How do I know if I have a claim against my broker?
If your financial advisor or brokerage firm recommended GWG L Bonds without fully disclosing the risks, or if the investment was not suitable based on your financial profile, you may have grounds for a FINRA arbitration claim. Many of these claims involve allegations of negligence, breach of fiduciary duty, or failure to perform proper due diligence.

Help for Investors

If you are concerned about your investment in GWG L Bonds, the securities attorneys at The White Law Group may be able to help you. Please call the offices at 888-637-5510 for a free consultation.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Seattle, Washington.