Sonn Law Group Announces that it has filed a $1.7 Million lawsuit for a retired NBA player alleging that Argus Capital Ltd. was negligent over its sales of GWG L Bonds and in conducting due diligence of the issuer, GWG Holdings.
The lawsuit was filed with the Financial Industry Regulatory Authority, or FINRA. The case number is 22-01967 and was filed in Milwaukee.
In January 2022, GWG stopped paying investors who bought GWG L Bonds. On April 20, 2022, GWG Holdings filed for bankruptcy. The bankruptcy filing revealed that the assets that GWG held were highly speculative and illiquid. The assets included investments in life settlements, a/k/a viaticals, a startup tech company, and a company that purported to provide loans or liquidity solutions to other investors who held illiquid products.
It also revealed that GWG had not been profitable for many years. The L Bonds were sold to retail investors nationwide and generally marketed as safe for retirees, and others who wanted a conservative fixed income investment.
“We believe ordinary due diligence would have uncovered serious and material problems with GWG, including its inability to generate profits, its strange combination with Beneficent followed by its separation from Beneficent, the lack of any verifiable valuation for the life settlement contracts, and the strange structure of allowing the contracts that GWG paid for to be held by separate companies that only pledged the income stream from the life settlement contracts,” said Jeffrey Sonn, of Sonn Law Group.
“Given these multiple red flags and more, it should not surprise investors that a small percentage of broker-dealers nationwide approved GWG L Bonds for sale,” added Adolfo Anzola, of Sonn Law Group. “We believe no reasonable broker-dealer should have ever approved this investment for sale to any investor,” said Sonn.
Sonn Law Group represents many GWG L Bond holders around the country. Sonn Law Group attorneys have handled hundreds of securities fraud and negligence cases, involving many types of investments, and have recovered hundreds of millions for investors. Call Sonn Law Group for a free consultation at 833-912-3000.