GWGHQ.US
id: 653
GWG Holdings ($GWGH) $50M Investor Settlement
$50,500,000
Cash SettlementN.D. Texas
Court3:22-cv-00410
Case number12/23/2017
Class period Start04/20/2022
Class period EndGWG Holdings ($GWGH) has agreed to settle $50M with investors to resolve claims that it engaged in fraud by operating a Ponzi-like scheme, misusing investor funds, and hiding its financial instability.
Outline
In January 2022, GWG Holdings admitted it could not make key payments to investors, and soon, they filed for bankruptcy. By March 2022, $GWGH fell over 30% as allegations of fraud surfaced, and investors later filed a lawsuit claiming that the company’s leadership operated a Ponzi scheme.
Timeline
- January 18, 2022 – GWG disclosed that it could not make the required investor payments.
- February 20, 2022 – GWG filed for Chapter 11 bankruptcy.
- March 2022 – Reports of financial instability surfaced, and $GWGH dropped over 30%.
- July 31, 2024 – Investors filed a lawsuit, alleging fraud, mismanagement, and misuse of investor funds.
- October 1, 2024 – GWG finalized a $450,000 settlement to resolve investor claims and financial misconduct allegations.
Background
Between 2020 and 2022, GWG Holdings sold high-yield L Bonds to investors, promoting them as safe, asset-backed investments tied to life insurance portfolios and a new alternative platform called The Beneficient Company Group. The company described Beneficient as a fast-growing business with strong long-term potential.
However, GWG diverted hundreds of millions from L Bond proceeds into Beneficient, which struggled to generate revenue. Some funds were used to repay related-party loans, while the company reported inflated goodwill and failed to maintain proper financial controls.
In November 2021, GWG disclosed accounting issues and announced it would restate prior financial statements. In January 2022, it suspended payments to L Bond investors, citing liquidity problems.
Three months later, in April 2022, the company filed for Chapter 11 bankruptcy
Following this, $GWGH dropped by 30%.
By July 2024, investors filed a lawsuit against the company.
What Can Investors Expect Now?
GWG Holdings has agreed to settle $450K with investors to resolve claims that it engaged in fraud and mismanagement by operating a Ponzi-like scheme, misusing investor funds, and concealing its financial instability, which ultimately led to its bankruptcy.
If you were damaged due to this situation, you can file for a payout and get your share of the settlement. You can check if you are eligible and other details in the FAQ section below.
Case Status
Distribution Preparation
Alleged Offence
Mismanagement,
Financial Misrepresentation,
Fraud,
Price manipulation,
Malpractice,
Negligence,
Breach of Fiduciary duty
Suspected Party
Directors,
Management,
Shareholder,
Investment Bank,
Service Provider
Security Type
Stocks
Trade Direction
Long
Filing date
03/30/2023
Lead Plaintiff Deadline
05/30/2023
Plaintiffs
David Scura
Attorneys
Federman & Sherwood (Richardson, TX), Glancy Prongay & Murray LLP (Los Angeles, CA)
Defendants
BRAD K. HEPPNER, JON R. SABES, STEVEN F. SABES, PETER T. CANGANY, RICHARD W. FISHER, THOMAS O. HICKS, DENNIS P. LOCKHART, BRUCE W. SCHNITZER
Judge
Hon. Sidney A Fitzwater
Administrator
EPIQ
Settlement agreement date
2025-03-06
Attorney fee
$8,984,000
Trades matching type
FIFO
Frequently Asked Questions
Who is eligible for this settlement?
Do I have to sell securities to be eligible?
How long does the payout process take?
What is 11th Estate?