Concerned about investment losses in GWG Renewable Secured Debentures?
Have you suffered losses investing in GWG Renewable Secured Debentures? If so, The White Law Group may be able to help you recover your losses by filing a FINRA Arbitration claim against the brokerage firm that sold you the investment.
The White Law Group continues to investigate GWG Renewed Secure Debentures on behalf of investors.
GWG Holdings, Inc., a financial services company, purchases life insurance policies in the secondary market in the United States, according to Bloomberg.
GWG Holdings, Inc. began selling Renewable Secured Debentures in 2012. GWG purchases life insurance policies on the secondary market at a discount to the face value of the policies. Once GWG purchases a policy, it pays the policy premiums until the insured dies. GWG hopes to earn returns by collecting more upon the maturity of the policies than it has paid to purchase, finance and service the policies.
GWG has purchased almost all of the policies that it owns with funds borrowed from financial institutions or investors, according to FINRA. FINRA also states that the company has a limited operating history and it not yet profitable.
GWG requires a minimum investment in the GWG Renewable Secured Debentures of $25,000 and an additional investment can be made in $1,000 increments, according to FINRA. The debentures have varying maturity terms and interest rates, from six-month debentures offering an annual interest rate of 4.75% to seven-year debentures offering 9.50%, according to FINRA.
According to the prospectus, the life insurance policies held by GWG are not collateral for obligations under the debentures. Instead, those policies have been separately pledged collateral for a line of credit used by GWG to purchase life insurance policies, according to FINRA.
GWG Renewable Secured Debentures are illiquid and high-risk.
According to FINRA, investments in the debentures are illiquid as investors do not have to access their principal prior to maturity unless the request is due to death, bankruptcy or total disability. If GWG decides to prepay the debentures other than under those circumstances, a prepayment fee of 6% is charged and there is no trading market.
Broker’s that choose to sell high-risk debentures are required to perform adequate due diligence to determine if such investment is suitable for each individual client. Investment recommendations should be in line with the client’s age, investment experience, net worth, risk tolerance, investment objectives, and income.
When a broker overlooks suitability requirements or misleads a client, not only are they potentially liable for investment loss, the brokerage firm that employs such brokers may also be on the hook for losses.
Recovery of Investment Losses
If you invested in debentures issued by GWG Holdings Inc and would like to discuss your litigation options with a securities attorneys, please call The White Law Group at 888-637-5510 for a free consultation.
The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida.
For more information on The White Law Group, visit www.whitesecuritieslaw.com.