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Investors Still in the Dark over GWG Holdings "L" Bond Payments

By George C. Miller, Partner of Shustak Reynolds & Partners, P.C. posted on Tuesday, February 22, 2022.

George C. Miller

George C. Miller

Partner

Location: San Diego, California
Phone: (619) 696-9500 (Ext. 105)
Direct: (619) 501-8270
E-mail[email protected]

In January 2022, GWG Holdings Inc., promoter of its high-yield bond product GWG L Bonds, reportedly missed $13.6 million in payments to investors on its GWG L bond series. Those bonds raised money to finance the purchase of life insurance policies from policy holders on the secondary market and were offered to investors primarily through independent broker-dealers, including Emerson Equity.

GWG Holdings offered L bonds in 2, 3, 5, or 7-year increments with annual interest rates ranging from 5.5% - 8.5%. These investments were attractive to certain investors seeking higher yields in what had been a historically low interest rate market.

On January 15, 2022, GWG Holdings purported to grant itself a 30-day grace period to catch up on its missed investor payments, according to a Form 8-K the company filed with the Securities and Exchange Commission. In a recent press release from the company, GWG Holdings confirmed it has paused L Bond sales and will not, for the foreseeable future, make monthly interest or maturity payments on its L Bonds as the company consults with “financial and legal advisors” to explore its options for restructuring. In this case, no new news is unlikely to be good news for investors, who remain in the dark. 

 

Shustak Reynolds & Partners has been advising brokers, financial advisers, registered investment advisers and others in the financial services industry for 40 years.
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Attorney George C. Miller can be reached in the firm’s San Diego office at (619) 696-9500.

 

 

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