[SallyB]

Originally Posted by retiredguy123

Is there any evidence that GWG did anything illegal? Losing investors' money in a high risk investment is not illegal. As long as they acted in accordance with the prospectus, there would be no recourse in a lawsuit.

Yes, there is evidence that GWG did illegal transactions. The CEO transferred $258 million dollars illegally according to the SEC reports. The SEC has been investigating GWG for years. One thing they are investigating is the "Rob Peter to Pay Paul". GWG had $2 Billion in L Bonds and the death claims on the life policies they held did not cover their high interest returns monthly to bondholders. So, they raise the incentives to brokers to sell more so they could use the new money to pay their monthly obligations. What I read is GWG monthly obligations is somewhere around $48 million a month in interest to bond holders.

I also read part of Whitaker job was to do his due diligence into the companies he sells. How could this have been missed.

[SallyB]

Originally Posted by retiredguy123

Here is a Department of Labor website that explains the fiduciary requirements for retirement accounts.

Fiduciary Responsibilities | U.S. Department of Labor

Thank you

[LuvtheVillages]

Originally Posted by danglanzsr

I am an investor with Whitaker. GWG is in Chapter 11 reorganization (Southern District of Texas, cases 22-90032 and 22-90033) The L bonds have priority in the bankruptcy case and there is a high likelihood that the bonds will be paid since QWG has over a billion dollars in assets according to filings in the bankruptcy court. It is premature to claim that L bond investors have lost all their money. Therefore any law suit based on loss from the sale of the bonds would be premature. I am only addressing the GWG claims, not any other grievance others may have against Whitaker

From the on-line publication Investment News:

"In its bankruptcy filings, GWG Holdings reported $3.5 billion of total assets and almost $2.1 billion in total debt. While its assets reportedly outweigh its debt, GWG Holdings’ big hurdle is that many of those assets are illiquid, hard-to-value pools of life settlements, or unwanted insurance policies that consumers sell to investors like GWG Holdings, which can come with risks.

Leading up to the start of this year, GWG Holdings, a publicly traded company with the ticker GWGH, had struggled to file its audited quarterly and annual financial statements on time."


So it looks like there won't be much cash available until the people who sold their life insurance policies die.

From the same source:
"... the company’s collapse, including GWG’s defaulting on $13.6 million in payments in January to bondholders."

So they can't even make their interest payments!

Do your own research. Don't rely on what Whitaker sends you.

[SallyB]

Originally Posted by PersonOfInterest

All Investing carries risk. Those who rely on the knowledge and advise of others to invest increase that risk as well. I have little sympathy for those who use a financial adviser, loose money and then blame the financial advisor. Take responsibility for managing your own money and learn to choose your own investments. If you trust someone's decisions and have a bad outcome, learn the Lesson. Make your own decisions.

Thank you for responding. I don't it is fair to blame a person who seeks help from a broker/financial advisor not everyone understands the market and need help from someone who is supposed to be trusted. By what you are saying we should not ever look for help in matters we don't understand. Don't we all seek help from a professional on matters we don't understand plumbers, electricians, lawyer and so on.
This is not 100% on my parent's fault, yes they should have not been so trusting.

[wmcgowan]

roll them over to Fidelity or Schwab - I mean at what point are their losses too much?

[Macevoyja]

There are no ‘free’ lunches here or anywhere else .

[Tyson]

Three words, VANGUARD, VANGUARD, VANGUARD.

[MDFlyer]

Originally Posted by SallyB

Thank you for the information will be showing my parents. I wonder just how many Villagers were taken by him and GWG.

Many of us have been "advised" by Michael Whitaker. His advice is worthless to many who, particularly, up in age since he doesn't "advise" them according to their financial status or age. He seems only interested in the money he makes from selling GWG products. We also invested in GWG and were told by Michael to hang in there even though he knew that they had missed two reporting quarters which should have been a bright red flag. Fiduciary NO.

[Bilyclub]

Originally Posted by PersonOfInterest

All Investing carries risk. Those who rely on the knowledge and advise of others to invest increase that risk as well. I have little sympathy for those who use a financial adviser, loose money and then blame the financial advisor. Take responsibility for managing your own money and learn to choose your own investments. If you trust someone's decisions and have a bad outcome, learn the Lesson. Make your own decisions.

From what has been posted here, it sounds like the advisor sold out his clients for a bigger commission. Perhaps, Seniors vs Crimes might get involved.

[Babubhat]

Wait until you see how much bankruptcy attorneys fees eat up any remaining assets. The field is a gold mine.

By the way, anyone else notice how local wealth advisors have polo ponies, eat frequently in expensive restaurants and have flashy cars? It’s at your expense.

Read up on Josh Brown, reformed broker on cnbc. Money is supposed to work for you

[Boomer]

Originally Posted by SallyB

Thank you for responding. I don't it is fair to blame a person who seeks help from a broker/financial advisor not everyone understands the market and need help from someone who is supposed to be trusted. By what you are saying we should not ever look for help in matters we don't understand. Don't we all seek help from a professional on matters we don't understand plumbers, electricians, lawyer and so on.
This is not 100% on my parent's fault, yes they should have not been so trusting.

SallyB, I am so sorry this is happening to your parents.

Even though there are some good advisors around, there are also sewer rats in the business of other people’s money. Their pitches are basically smoke and mirrors, designed to make those who are seeking advice think that they can never understand what to do with their own money, so they have to turn it over.

I have no advice for you, other than to comment on what someone else said in Post #40 — about getting the remainder of the money out if you can and getting it into Fidelity or Schwab……

If I were you, I would set up an appointment with one of those and find out what would be involved in moving the accounts to try to rescue what you can. (I would also talk to Vanguard. They do not have local offices like the other two, but I think they have people you can talk to by phone.)

I wish you good luck.

Boomer

[PanamaKim]

I wonder if Seniors Against Crime would be helpful? They have an office in Brownwood and can be reached by phone during business hours. I absolutely hate that there are people in the world that try to separate folks from their money in such deceitful ways.

[Babubhat]

Way beyond their scope.

[PersonOfInterest]

Originally Posted by SallyB

Thank you for responding. I don't it is fair to blame a person who seeks help from a broker/financial advisor not everyone understands the market and need help from someone who is supposed to be trusted. By what you are saying we should not ever look for help in matters we don't understand. Don't we all seek help from a professional on matters we don't understand plumbers, electricians, lawyer and so on.
This is not 100% on my parent's fault, yes they should have not been so trusting.

Yes we should see professional help, but we also should either have some knowledge about whatever we are using a professional for OR we need to accept that we are at their mercy and could be misguided without knowing it. When your plumber says "Repipe the entire house" or the electrician says you need a 'Power Conditioner' for $5,000 or the Lawyer tells you he will only represent your personal injury case if given a $10,000 retainer. All may have good intentions as well, but it still should be Your decision, not the professionals.

[spexdr]

I got scammed out of a lot of money also. At least your parents can deduct the loss, as it’s a Ponzi scheme, from their taxes.