Wolper Law Firm, P.A. Is Investigating GWG Holdings Claims Against Centaurus Financial

GWG Holdings (GWGH) formally defaulted on its obligation to L bondholders on February 14, 2022. Red flags were raised among investors after the company notified them that no interest or dividend payments would be made in January 2022, nor would maturity or redemption requests be honored, making the L bonds virtually worthless. On April 20, 2022, the Dallas company, which made a name for itself through life insurance bond sales, filed for bankruptcy protection after financing arrangements could not be made. This is a disastrous outcome for unsecured stock and bond holders as all income payments have ceased and the opportunity for principal recovery appears unlikely.


Retail investors in these privately issued, high-interest L bonds purchased more than $1B worth of them through more than 100 broker-dealers. But these alternative securities were created as high-risk, speculative investments–not typically suitable for low-risk tolerance investors who count on the liquidity of their securities. GWG Holdings bought life insurance policies through secondary sales using money raised by L bond sales; when the life insurance policies paid out, those funds repaid investors.


GWG Holdings paid handsome commissions to brokerage firms that agreed to sell its L Bonds to retail clients. This practice continued in 2019 and 2020 even though GWG Holdings publicly reported financial headwinds and was unable to timely file its annual financial statements.

Notwithstanding these financial challenges, in a recent report by Bruce Kelly published in https://www.investmentnews.com/broker-picked-wrong-time-to-boost-bet-on-gwg-bonds-221266, Centaurus Financial, Inc., a large independent brokerage firm based in California, took steps to increase its sales of GWG Holdings L bonds in 2019 and 2020.  Specifically, Centaurus Financial reportedly raised the “cap” of permissible sales from $100,000 per retail customer to $150,000.  This allegedly resulted in an effort by Centaurus brokers to continue selling GWG L Bonds in order to capture high commissions.

Indeed, the sales of GWG Holdings L Bonds grew from $265,000,000 in 2018 to $403,000,000 in 2019 and $440,000,000 in 2020. This meteoric rise in sales can be explained by the internal sales push at brokerages like Centaurus Financial, Emerson Equity and others.

In February 2022, GWG Holdings defaulted on $13.6 million in payments and interest that it owed to investors and has since filed for bankruptcy protection, leaving clients with large, unexpected losses.


The Wolper Law Firm, P.A. represents investors nationwide in securities litigation and arbitration on a contingency fee basis.  Matt Wolper, the Managing Principal of the Wolper Law Firm, P.A., is a trial lawyer who has handled hundreds of securities cases during his career involving a wide range of products, strategies and securities. Prior to representing investors, he was a partner with a national law firm, where he represented some of the largest banks and brokerage firms in the world in securities matters. We can be reached at (855) 453-8611 or by email at mwolper@wolperlawfirm.com.

Attorney Matthew Wolper

Attorney Matthew WolperMatt Wolper is a trial lawyer who focuses exclusively on securities litigation and arbitration. Mr. Wolper has handled hundreds of securities matters nationwide before the Financial Industry Regulatory Authority (FINRA), American Arbitration Association (“AAA”), JAMS, and in state and federal court. Mr. Wolper has handled and tried cases involving complex financial products and strategies ranging from traditional stocks and bonds to options, margin and other securities-based lending products, closed/open-end mutual funds, structured products, hedge funds, and penny stocks. [Attorney Bio]