Investor Alert:  Law Firm Iorio Altamirano LLP Investigates the Sale of L Bonds by Emerson Equity LLC

New York securities arbitration law firm Iorio Altamirano LLP is investigating potential securities arbitration claims against Emerson Equity LLC and its network of broker-dealers for their sale of L Bonds issued by GWG Holdings, Inc. (Nasdaq: GWGH).

On January 15, 2022, GWG Holdings Inc., a company known for selling life-insurance bonds, missed interest and principal payments to L bond investors. The company is also reportedly seeking rescue financing in an effort to avoid bankruptcy after facing a series of accounting issues, financial stress, and an SEC investigation.

GWG’s L Bonds are speculative, high-risk, and illiquid securities that were sold as private placement offerings.

GWG sold the L bonds through Emerson Equity LLC and a network of regional broker-dealers, who pitched the products to individual retail investors. Emerson Equity LLC, an SEC-registered broker-dealer and FINRA member based in San Mateo, California, received a commission ranging from 0.75% to 5.00% of the principal amount of the L Bonds sold. The firm also received additional compensation and commissions, up to 8% of the aggregate gross proceeds from the sale of L Bonds. The network of regional broker-dealers who shared in the commissions included Centaurus Financial, Inc., Aegis Capital, LLC, NI Advisors, Western International Securities, Inc., and over 100 other firms.

Brokerage firms are required to make investment recommendations that are in the best interest of their customers.  Financial advisors also have an obligation to be truthful and disclose all material facts and risks to customers when making investment recommendations. Firms and brokers are also required to conduct reasonable due diligence of products they offer before recommending them to any clients. There are serious concerns that some broker-dealers recommended GWG’s L Bonds to individuals even though the product was not suitable for them.  There are also concerns that firms failed to perform reasonable due diligence about GWG’s L Bond before selling the risky products to their customers.

Investors who purchased the L Bonds offered by GWG Holdings through Emerson Equity LLC, Centaurus Financial, Inc., Aegis Capital, LLC, NI Advisors, Western International Securities, Inc., or any other broker-dealer are encouraged to contact Iorio Altamirano LLP for a free and confidential consultation. We can review and analyze potential claims and advise individuals of their legal rights without obligation or cost.

See Also:

GWG L Bond Investors Seek Recourse After GWG Holdings, Inc. Files for Chapter 11 Bankruptcy

About the L Bonds

An L bond is a financial instrument created by GWG, which pooled money from bond investors to purchase life-insurance policies on the secondary market, and then used payouts from the policies when people died to repay investors.

GWG Holdings began selling L Bonds in 2012. According to a firm Form 8-K, it began selling a $2 billion L Bond offering in the summer of 2020 to a growing network of advisors from 127 firms.

GWG Holdings offered the L Bonds with a maturity ranging from 2 to 7 years and paying an interest rate of 5.50% to 8.50%.

The L Bonds are speculative, high-risk, and illiquid private placement offerings. They are secured by the assets of GWG Holdings and a pledge of all of the common stock by its largest stockholders.  According to the June 2020 offering prospectus, the key features and risks of the L Bonds include:

  • Speculative, High-Risk, Illiquid: “Investing in our L Bonds may be considered speculative and involves a high degree of risk, including the risk of losing your entire investment…. The L Bonds are only suitable for persons with substantial financial resources and with no need for liquidity in this investment.”
  • Illiquid: “We do not intend to list our L Bonds on any securities exchange during the offering period, and we do not expect a secondary market in the L Bonds to develop. As a result, you should not expect to be able to resell your L Bonds regardless of how we perform. Accordingly, an investment in our L Bonds is not suitable for investors that require liquidity in advance of their L Bond’s maturity date.”
  • 6% charge to redeem early: “In the event we agree to redeem L Bond upon the request of an L Bond holder — other than after death, bankruptcy or total permanent disability— we will impose a redemption fee of 6% against the outstanding principal balance of the redeemed L Bond.
  • Subordinate Debt: “We maintain senior borrowing arrangements that subordinate to our senior lenders the right to payment on, and the collateral securing, the L Bonds. In addition, these borrowing arrangements restrict our receipt of distributions from certain of our operating subsidiaries, subject to certain exceptions. These provisions will restrict cash flows available for payment of principal and interest on the L Bonds. From time to time we may add or replace senior lenders and the particular arrangements under which we borrow from them.”
  • L Bonds Sold as “Units” of $1,000:  L Bonds will be sold as “Units,” with each whole Unit representing $1,000 in principal amount of L Bonds.

L Bonds were likely not suitable for investors with a low-risk tolerance or investors who had liquidity needs.

About Iorio Altamirano LLP

Iorio Altamirano LLP is a securities arbitration law firm located in New York, NY. We represent investors nationwide and vigorously pursue FINRA arbitration claims on behalf of investors to recover investment losses.

We have nearly 20 years of combined experience as securities arbitration lawyers and have helped investors recover investment losses in over 1,000 cases. Our firm will file a FINRA securities arbitration claim on your behalf on a contingency fee basis to try to recover your losses. If we do not obtain a recovery, you do not owe us a legal fee.

If you have invested in L Bonds offered by GWG Holdings, contact securities arbitration lawyers August Iorio at or Jorge Altamirano at Alternatively, you may reach the firm by phone toll-free at (855) 430-4010.

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