Tr?id=566623520170033&ev=PageView&noscript=1

GWG Blames SEC Investigation Of Sales Practices For Its Collapse

Posted on May 3rd, 2022 at 1:39 PM
GWG Blames SEC Investigation Of Sales Practices For Its Collapse

From the Desk of Jim Eccleston at Eccleston Law:

In its Chapter 11 bankruptcy filings, GWG has criticized the Securities and Exchange Commission’s (SEC’s) investigation of broker-dealers that sold at least $1.6 billion of its life-settlement backed bonds as a major reason for the firm’s collapse, including GWG’s defaulting on $13.6 million in payments to bondholders. 

According to the filings, GWG contends that the SEC’s 2020 investigation of the firm eventually included the sales practice of some of the 145 broker-dealer firms that sold the bonds. The SEC’s investigation of those broker-dealers negatively impacted GWG’s reputation in the marketplace as well as the firm’s capacity to raise funds from sales of L bonds, according to the company. While GWG reported $3.5 billion of total assets and $2.1 billion in total debt, most of those assets are illiquid or hard-to-value pools of life settlements. 

According to the court filing, the SEC served a subpoena onto GWG Holdings in October 2020 relating to an investigation into the firm’s accounting procedures and issuance of bonds. According to GWG, the SEC’s investigation significantly slowed sales. GWG previously signaled an intention to file for bankruptcy protection when the firm was unable to file its 2021 annual report and accompanying financial statements after its failure to hire an auditor to replace Grant Thornton. 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, regulatory and disciplinary matters.

 
 

Tags: eccleston law, gwg holdings, sec

Return to Archive

TESTIMONIALS

Previous
Next
Quotes Bigger

You guys are good!

Mike L.

LATEST NEWS AND ARTICLES

1791996515 Law
October 14, 2026
FINRA Study Finds Advanced Investment Knowledge Does Not Eliminate Fraud Risk

Research using the FINRA Investor Education Foundation's 2024 National Financial Capability Study found that fewer than one in five investors with non-retirement investments demonstrate advanced investment literacy.

1791918358 Law
October 13, 2026
LPL Financial Faces Investor Claims Tied to Former Broker's Outside Activities

LPL Financial faces at least nine pending investor claims involving former El Paso, Texas broker Michael C.

1791818498 Law
October 12, 2026
SEC Targets Companies in Alleged $15 Million Social Media Investment Fraud Schemes

The Securities and Exchange Commission (SEC) has charged entities behind two alleged investment fraud schemes that raised more than $15 million from investors through WhatsApp, Facebook and other online platforms.