Need help for my parents they have GWG L Bonds with Michael Whitaker and Associates
 

July 2023 Update: Looks like if my parents get anything back it will take serval years because GWG and BENE which is their largest asset is in downward financial spin. What I have found out you have 6 years to make a FINRA arbitration against your Broker.
Please read.
GWG Bankruptcy Update (July 14, 2023): The Residual Value of the GWG L Bonds Remain Suspect as Beneficient Receives a Wells Notice from the SEC — Securities Arbitration Lawyer Blog — July 14, 2023



UPDATE: Here is what is happening in the courts

GWG Bankruptcy Update (April 17, 2023): Liquidation Options Become Clearer as Recovery for Bondholders Remain Uncertain — Securities Arbitration Lawyer Blog — April 17, 2023

Last week while visiting my parents they informed us they lost close to $100,000 with their broker Michael Whitaker. They invested in a very high-risk company GWG which has filed for bankruptcy about a year ago. My parents were told this was not high-risk by Michael Whitaker and GWG at the lunch where they first meet them. Michael has sent numerous emails to my parents over the last year telling to hang in there. They purchased a product call L Bonds which had a hold time for 7 years at that time Michael told them he had close to $10 million of his clients' money in GWG so they thought it must be safe.

I decided to look into GWG and Michael and the information I have found is not promising.

The information I have found says that this "GWG Was a Classic Ponzi Scheme"-Official Committee of Bondholders of GWG Holdings, Inc. The CEO transfer from the bondholders $258 million into his new company Beneficent. It stated that GWG used new bondholder funds to pay their monthly pay outs to existing bondholders for years and they sold over $1 billion in L Bonds.

I also found that the company Michael works for New Bridge Securities is also under investigation over the GWG L Bonds.

I want my parents to call a lawyer, they are hesitant since they have been with Michael for quite some time.

So, my question is for anyone who still works Michael have to file a lawsuit or are you going too. If you did file a lawsuit, what lawyer did you use and were you happy with the results.

Oral representations have little to no value in court. Call a few securities attorneys for a free case evaluation. I suspect the numbers may not be enough to interest them

Can't help you but thanks for the information.

I'm sorry that it happened. GWG L bonds is a private investment in purchasing life insurance policies at a discount with the hope of making money when the person who sold the policy dies. Basically, this investment is classified as a "junk" bond. According to the GWG prospectus for the L bonds:

"An investment in our securities involves a high degree of risk."

To prevail in a lawsuit, I think your parents would need to prove that the broker was acting as a "fiduciary" and provided advice that was not consistent with their overall financial situation. But, my guess is that the broker was not a fiduciary, which means that he didn't need to provide appropriate advice. Also, they were most likely provided a copy of the prospectus which clearly defines the investment as high risk, not a safe investment. Personally, I don't think a lawyer will do them much good.

A Google search using "gwg l bonds class action lawsuit" returned over 50 links to various law firms engaged in class action lawsuits.

Good luck with that. If they win, the lawyers will make a bundle, and the investors may get a coupon for a hamburger and fries.

We almost signed up with them, but got bad vibes when they started to push us into creating all sorts of accounts without any specific things to invest in.

If you go FINRA Broker Check you will find that Michael Whitaker has 3 disclosures against him. Two are unresolved "Breach of Fiduciary Duty" for 100,000 and 232,000 $. This suggests that he is supposed to act as a Fiduciary but the resolution is taking a very long time. There are no other details shown. Good Luck!!

Whitaker conducts some of those free lunches with a ‘seminar’ in TV sometimes. Thanks for the heads up. Wonder if he has suits outstanding here.

I think the lawsuits are against GWG. Whitaker is just the broker who is selling financial products.

See post # 8. There are suits against Whitaker personally for not fulfilling his fiduciary duty. Go to FINRA Broker Check.

I found this law firm enclosed in suit.
Michael Whitaker is Facing Investor Allegations of Negligence
Sorry for your parents being naive always get documentation in writing not hearsay

Thank you for the information

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

So, you can be involved in a Ponzi scheme and still offer people free lunch seminars. I am taken back, that he can still operate. I feel bad for the seniors that he has hurt.

He is not the only “financial advisor” that has sold this product. Here is a website from an attorney seeking people who have had dealings with the holding company you describe.

Mark Cline Allegedly Recommended GWG L Bonds -

Brokers are required by law to act as a fiduciary when advising clients regarding a retirement account, but not about a non-retirement account. Most brokers, who sell risky investments, try to avoid the fiduciary responsibility if they can.

You could search online for the names of (Florida) lawyers representing clients filing lawsuits against the broker and his brokerage firm and then contact one or more of those lawyers to discuss options. Searching will take some effort. Those legal actions could take place in a state court of law or a FINRA arbitration action. State courts have more information available to the public compared to the private FINRA actions.

The ‘attorney of record’ is listed in online public court files in Florida cases if you can find the cases. In Florida state trial courts, the databases are at the county level. This means you make have to search online using each county’s court records (e.g., Sumter, Lake, Marion). A place to start is searching on the name of the broker and his brokerage firm as defendant.

The requirement to act as a fiduciary when giving advice for retirement accounts is a Federal law. It doesn't apply to non-retirement accounts.

Straw man, now.

OP did not say anything about a retirement account. If not a retirement account, then Federal ERISA law does not apply.

WHY WHY would anyone buy something like this ?
 

Iam constantly amazed at some of the purchases of our Village people ! I cant tell you how many people lost huge amounts of money using a paid financial advisors and held TECH through a rising fed rate environment ..and financial advisor would know that a mutual fund full of tech would plunge when the fed was raising interest rates,,,as tech stocks are highly leveraged

I agree about financial advisors. For most investors, advisors don't add much value to investing. They get away with it because many of their clients don't hold the advisor accountable for the performace of their advice. Often, advisors cannot outperform a simple index mutual fund.

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

GWG is in Chapter 11 Bankruptcy in the Southern District of Texas (Cases 22-90032 and 90033). Until the bankruptcies conclude, no one has lost any money on L bonds. According to filings in the court L bonds have priority over other claims and it is likely they will be paid. Also, they do not mature until 2025 so, at this point, only the interest payments are due. I am a client of Whitaker and a holder of L bonds.

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.

I know this is horse already out of the barn but IMO any person/company offering a free lunch is just fishing for business and should be steered clear of. Sorry this is happening to your parents.

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.

My moms are in her IRA account. They also have the GWG in their trust account.

Thank you for your response. Reading todays update I have very little hope for my parents. GWG has $1.2 Billion in L Bond debt. The life policies they own will not cover the bond debt. Now GWG is looking into Chapter 7 bankruptcy I am not sure what that does to the bondholders. The court again yesterday has not approved GWG plan.
This was a Ponzi scheme everything I have researched doesn't look like the bondholders will come out whole.
My question to my parents is why you trust GWG when we now know they are crooks. Why trust Whitaker when he had no business selling theses risky bonds to seniors.

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

Fiduciary Responsibilities | U.S. Department of Labor

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.

Thank you

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.

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.

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

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

Three words, VANGUARD, VANGUARD, VANGUARD.

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.

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.

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