GWG Holdings Delisting Threatened by NASDAQ Unless Financial House Put in Order, as Bad News Mounts for Investors

Chicago-based Stoltmann Law Offices is representing clients who’ve suffered losses from investing in GWG Holdings bonds.  The news has been bitter for GWG investors this year. GWG (Nasdaq: GWGH) stated on April 6 that it received a letter from the Nasdaq Stock Market notifying the company that it was not in compliance “as a result of not having timely filed its Annual Report on Form 10-K for the fiscal year ended December 31, 2021.”

In January, the company stated that it would miss nearly $14 million in interest payments on “L” Bonds that were due on January, 15, 2022. GWG is a financial services firm based in Dallas that owns and manages a diverse portfolio of life insurance policies that included some $1.8 billion in face value of life insurance policy benefits.

GWG has told investors it isn’t paying interest on its bonds — or dividends — on its Redeemable Preferred Stock and Series 2 Redeemable Preferred Stock. L Bonds are unrated bonds that based on life insurance settlements. They are created to purchase life insurance contracts and have yielded between 1% and 5% of the market price as broker commissions. The company has been selling high-yield bonds since 2012. The 2020 offering of $2 billion in L Bonds of a value of $2 billion was sold by advisors from 127 firms.

To date, investors have been waiting to see if GWG will make them whole. GWG Holdings has already missed principal payments of $3.25 million and interest payments of $10.35 million in L Bonds. The Nasdaq letter “has no immediate effect on the listing or trading of GWG’s common stock on the Nasdaq Capital Market,” the regulator stated. Now GWG “is required to submit a plan to regain compliance within 60 calendar days from the date of the letter. If the plan is accepted by Nasdaq, then Nasdaq can grant the company up to 180 calendar days from the due date of the Form 10-K to regain compliance.” (An annual 10-K form is required to be filed by publicly traded companies).

Note: Brokers must carefully vet all trades and investments with you to ensure that the vehicles they are selling meet your financial goals and risk tolerance. If you choose to take on more risk, they must explain in clear detail the downside of such an investment.

If you invested in bonds offered by GWG Holdings based on the advice of a financial advisor, you may have a claim to pursue through FINRA Arbitration. Please contact Stoltmann Law Offices, P.C. at 312-332-4200 for a free, no obligation consultation with a securities attorney. Stoltmann Law Offices is a contingency fee law firm which means we do not get paid until you do!

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