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

You are the best attorneys in the country.

CC

LATEST NEWS AND ARTICLES

January 16, 2026
SEC Signals Sweeping IPO Rule Changes to Ease Path for Smaller Companies

The Securities and Exchange Commission (SEC) plans to overhaul its public offering framework to make it easier for smaller companies to access the public markets, according to remarks SEC Chairman Paul Atkins delivered at the New York Stock Exchange, as reported by Bloomberg Law.

January 15, 2026
FINRA Flags Risks of Early Withdrawals and Exchanges in Registered Index-Linked Annuities

The Financial Industry Regulatory Authority (FINRA) has issued a renewed warning to the industry about the risks consumers face when they exit registered index-linked annuities (RILAs) before the end of the contract term.

January 14, 2026
FINRA Fines and Suspends Wells Fargo Advisor Over Fictitious Expense Claims

The Financial Industry Regulatory Authority (FINRA) fined and suspended a Wells Fargo Advisors representative in Waco, Texas, after finding that he submitted fictitious business expense claims, according to a FINRA Acceptance, Waiver and Consent (AWC) letter.