GWG Holdings Fails to Make $13.6 Million in Payments to Investors as Investigations Ramp Up

Attorney Advising Disclaimer

GWG Holdings Inc., missed $13.6 million in interest and principal payments for its L Bonds series, according to SEC documents. GWG Holdings stands at risk of default if it can’t come up with the funds in a timely manner.  An L bond is a high-yielding bond that financed the purchase of life insurance policies on the secondary market.  L Bonds are costly, complex, and risky products which brokers recommended to retail clients, and are now on the verge of default.

GWG’s website indicates that Emerson Equity (a broker-dealer in San Mateo, California) manages the GWG issuer; FINRA previously ordered Emerson Equity to pay $1.7 million for poor supervision of short-term mutual fund trades.

Brokerage firms other than Emerson may have also sold the increasingly-risky GWG Holdings product, and regulators have expressed concern about brokers and investment advisers selling GWG Holdings’ L Bonds to investors for whom the products were unsuitable, or selling away from their firm when their employing firm did not authorize sales of GWG Holdings.

For instance, FINRA in 2021 disciplined Moloney Securities broker Candice E Montie (CRD #4726799) for conducting private securities transactions away from the firm without approval. The prohibited transactions referenced in the report were $150,000 in sales of L Bonds issued by GWG Holdings.

FINRA previously barred David Joseph Escarcega of Phoenix, AZ (CRD #4367584) on charges of fraudulent misrepresentation to elderly clients in Arizona, California and Washington, claiming that Escarcega acted with intent to deceive, manipulate, or defraud older customers while associated with Strategic Financial Partners LLC.

The product associated with Escarcega’s purported fraud (debentures, or dept instruments), once again, were issued by GWG Holdings, Inc.

Another GWG Holdings seller disciplined by FINRA was Jeffrey D Board of Allied Beacon Partners, for again selling GWG debentures to an elderly client for whom such an investment was unsuitable.

If you invested with any brokerage firm, representative, or investment adviser who sold you L Bonds from GWG Holdings, especially if those sales were made away from the firm or without authorization, and the unsuitable sales of this complex and risky product have proven costly to you as GWG Holdings misses millions of dollars in payments and moves into a position for potential default, please call an experienced FINRA arbitration attorney at The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.

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