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 are the best attorneys in the country.

CC

LATEST NEWS AND ARTICLES

1781638769 Law
June 16, 2026
Cetera Hit With Class Action Lawsuit Over Cash Sweep Program

A proposed class action lawsuit has accused Cetera Financial Group and Cetera Investment Services of improperly profiting from customer cash held in the firms' FlexInsured Account Program, according to a report by ThinkAdvisor.

1781539717 Law
June 15, 2026
New York Insurance Agent Pleads Guilty to $50 Million Ponzi Scheme

A New York insurance agent and tax preparer has pleaded guilty to operating a Ponzi scheme that allegedly defrauded nearly 1,000 investors out of more than $50 million over several decades, according to a report by InvestmentNews.

1781279618 Law
June 12, 2026
FINRA Suspends Former LPL Broker Over Undisclosed Outside Business Activity

The Financial Industry Regulatory Authority (FINRA) has imposed a $5,000 fine and a 45-day suspension against former LPL Financial broker James R.