Did your Madison Avenue Securities broker recommend an investment in GWG L Bonds?
The White Law Group is currently representing investors in claims against their brokerage firms for improperly recommending high risk GWG L Bonds, sponsored by asset manager GWG Holdings Inc.
To learn about our recent FINRA claims involving GWG please see:
If you have suffered losses investing in GWG L Bonds with your Madison Avenue Securities broker, the White Law Group may be able to help you.
Unfortunately for investors, on April 20, 2022, GWG Holdings, Inc. filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Southern District of Texas (Case# 22-90032, 4:2022bk90032).
The company failed to make $13.6 million in combined interest and principal payments to its bondholders in January, and then again in February. GWG Holdings, a NASDAQ listed company, is currently under investigation by the SEC for allegations of misleading investors.
The company’s L Bonds are backed by life settlements. GWG pooled money from bond investors to purchase life insurance policies on the secondary market; then used payouts from the policies when people died to repay investors. These L Bonds are complex, high-risk investments that were portrayed to investors as being safe and a “sure thing.”
GWG Holdings began publicly offering and selling L Bonds in January 2012 and up until April 2021 through numerous regional broker-dealers, such as Madison Avenue Securities. As of September 2021, GWG had more than $2 billion in total liabilities, including $1.55 billion in L Bonds. According to its prospectus, the L Bonds’ security interest is “subordinate to other debt obligations.”
According to a class action lawsuit filed recently, in 2018 and 2019, GWG Holdings allegedly moved over $350 million to The Beneficient Company Group, its largest shareholder, and its subsidiaries and issued $366 million in L Bonds to one of the subsidiaries. GWG ran into serious liquidity problems in April 2021 when it reportedly ceased to sell the bonds. To keep it afloat, in August 2021, the company offered its entire portfolio of life insurance policies as collateral for loans.
As we previously reported in November 2021, the Beneficient Company Group separated from GWG Holdings after paying off its Commercial Loan Agreement with GWG.
Madison Avenue Securities Lawsuits to Recover GWG L Bond Losses
Broker dealers are required to perform adequate due diligence on all investment recommendations they make. They must ensure that each investment is suitable for the investor in light of the investor’s age, risk tolerance, net worth, financial needs, and investment experience.
Madison Avenue Securities is a dually registered broker dealer and investment advisor located in San Diego, California, according to FINRA. Madison Avenue Securities is one of many regional broker-dealers who sold the complex GWG L Bonds to retail investors.
If Madison Avenue or one of its registered reps makes an unsuitable investment recommendation or fails to adequately disclose the risks associated with an investment, they may be liable for investment losses through FINRA arbitration.
To learn more about the firm’s investigation of Madison Avenue Securities, please see:
If you suffered losses investing in GWG L Bonds with Madison Avenue Securities and would like to discuss your litigation options, please call the securities attorneys of The White Law Group at (888) 637-5510 for a free consultation.
These claims are distinct from the class action filed directly against GWG Holdings and could be pursued concurrently.
The Financial Industry Regulatory Authority (FINRA) operates the largest securities dispute resolution forum in the United States, and has extensive experience in providing a fair, efficient and effective venue to handle a securities-related dispute.
The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Seattle, Washington. The firm represents investors in FINRA arbitration claims throughout the country. To learn more about the firm’s representation of investors, please visit www.whitesecuritieslaw.com.