GWG L-Bonds Investor Losses?

Soreide Law Group is investigating potential investor claims related to the way securities brokers and financial advisors recommended and sold GWG L-Bonds. These products were widely marketed to individual investors, including retirees, as secure, income-generating investments. However, recent events have revealed serious problems, culminating in a bankruptcy proceeding that left investors with devastating losses. Below is a detailed explanation of what these bonds were, what happened in the bankruptcy, and how investors may still have options to pursue recovery.

What Are GWG L-Bonds?

GWG L-Bonds were issued by GWG Holdings, Inc., a financial services company headquartered in Dallas, Texas. The bonds were structured as corporate debt instruments. Investor money was pooled by GWG to acquire life insurance policies in the secondary market. The idea was that death benefits from these policies would eventually provide cash flow to repay investors. Billions of dollars were raised through these offerings, and the bonds were placed in many client portfolios through brokerage firms across the United States.

Concerns About GWG L-Bonds

It has been alleged that one of the biggest problems for investors began when GWG Holdings reportedly filed for bankruptcy. According to public reports, the company had allegedly faced years of financial struggles and regulatory attention, which some sources claim left it unable to keep operating. In or around June 2025, a bankruptcy court is said to have approved a final settlement that some commentators have described as disappointing for investors. While some accounts state that the gross settlement figure exceeded $90 million, reports also suggest that after legal fees and other expenses were deducted, the funds actually available to investors may have been closer to $59 million. This figure has been compared by observers to more than $1.6 billion that was allegedly invested in these bonds.

Some reports indicate that bondholders are expected to recover only about 3% of their initial investment, though exact amounts may vary. For instance, it has been claimed that an individual who invested $100,000 could receive only a few thousand dollars back. Commentators have argued that this result highlights the speculative and high-risk characteristics that have been associated with GWG L-Bonds, even though the products were allegedly marketed to some investors as suitable for conservative, retirement-oriented portfolios. According to multiple accounts, the bankruptcy has left thousands of investors claiming to have suffered severe financial setbacks.

Sales Practice Violations

In addition to the disappointing bankruptcy outcome, many investors are now examining how these products were sold to them in the first place. Brokers and financial advisors have a duty under FINRA’s suitability rule, and under Regulation Best Interest for sales made after 2020, to recommend only investments that align with a client’s financial situation and objectives. Yet GWG L-Bonds were frequently placed into the accounts of retirees and other investors who were seeking safety and income—not high-risk, illiquid debt securities.

Potential violations include unsuitable recommendations, misrepresentations about the safety of the product, failure to disclose the risks of illiquidity and default, and inadequate supervision by the brokerage firms that approved these sales. Investors harmed by these practices may be able to pursue claims through FINRA arbitration or similar legal actions, even though the bankruptcy itself produced such a small recovery.

Did You Sustain Losses By Investing In GWG L-Bonds?

Did you experience losses because of investing in GWG L-Bonds because of your financial advisor or securities broker? If so, reach out to Soreide Law Group online or at (888) 760-6552 and speak with a securities attorney about a potential recovery of your losses. Soreide Law Group has represented investors across the United States and has secured recoveries from brokerage firms on behalf of clients. The firm works on a contingency fee basis and advances all costs, so clients do not pay unless there is a recovery.