Dimond Kaplan & Rothstein P.A. is investigating GWG Holdings for failure to pay interest on L-Bonds. DKR is investigating potential defendants who may be responsible for GWG investment losses. On a related note, the SEC has subpoenaed GWG Holdings’ records as part of an investigation into the firm.
GWG Failed to Pay L-Bond Interest
According to recent SEC filings, GWG failed to make more than $10 million in interest payments that were due on January 15, 2022. In a letter to investors on Valentine's Day investors were informed that GWG Holdings had halted interest payments. In a statement to investors, the firm stated that while it is "identifying and reviewing restructuring options," monthly interest, maturity payments, dividends, and redemptions are all on hold. According to the firm, it will notify investors "if and when" the company can resume cash payouts.
The company also indicated that its 2021 annual financial statements will be filed late due to the refusal of the external certified public accounting firm to file the document.
GWG’s debts and liabilities apparently exceed its assets by millions of dollars.
Accountants Express Concerns About GWG’s Ability to Continue Operations
In its Form 10K for the fiscal year ending December 31, 2020, GWG stated that "Our existing failure to raise capital, repeated losses from operational processes, negative cash flows from operations, delays in carrying out our business plans, and the potential negative implications of the ongoing SEC non-public, fact-finding investigation cast significant doubt on our capacity to continue as a going concern." GWG’s accountants have stated that GWG’s financial problems “raise substantial concerns about [GWG’s] ability to continue as a going concern."
What is an L Bond
An L bond is a type of alternative investment vehicle that seeks to deliver a high return to a lender in exchange for the risk that an insurance policy premium or benefits will not be paid. An L bond is an unrated life insurance bond that is intended to fund the acquisition and premium payments of secondary market life insurance settlement agreements.
GWG L bonds are illiquid and cannot be sold on the secondary market. Shareholders must wait until the bonds mature before redeeming the principal amount, and the bond cannot be redeemed before the maturity date or the demise or incapacity of the primary policyholder.
Dimond Kaplan & Rothstein May Be Able to Help You
If you lost money in GWG Holdings, Inc., you should consult with experienced investment fraud lawyers. Dimond Kaplan & Rothstein P.A. often represents investors on a contingency-fee-basis, whereby we only are paid if we recover money for our clients.
Contact Dimond Kaplan & Rothstein Today
Contact an investment fraud attorney at Dimond Kaplan & Rothstein, P.A. to schedule a FREE case evaluation. Our offices are located in Miami, Los Angeles, West Palm Beach, New York, Naples, and we represent clients nationwide. Translation services are available.
