Overview
On December 9, 2025, after years of facing significant scrutiny over the sale of high-risk GWG Holdings, Inc. (“GWG”) corporate bonds (“L-Bonds”) from investors, state regulators, federal agencies, and self-regulatory organizations, Moloney Securities Co., Inc. (“Moloney Securities”) ceased doing business. Before shutting its doors, Moloney Securities had over 100 representatives and sold its business assets to Berthel Fisher & Co. Inc. Moloney Securities repeatedly faced investigations, inquiries, and lawsuits related to its sales of L-Bonds, and its failure to comply with the Securities and Exchange Commission’s Regulation Best Interest (“Reg BI”). Specifically, during the period from June 2020 through January 2022, Moloney Securities and its financial advisors sold approximately $41 million of L-Bonds to retail investors without complying with Reg BI’s: (i) care obligation (ii) conflict of interest obligation; (iii) disclosure obligation; and (iv) compliance obligation.
What Are GWG Holdings, Inc. L-Bonds?
GWG was a publicly traded financial services company that filed for Chapter 11 bankruptcy on April 20, 2022. From 2012 to 2022, it raised funds for the operation of its business by selling corporate L-Bonds to retail customers through a nationwide network of broker-dealers including but not limited to Moloney Securities. GWG’s corporate L-Bonds were frequently marketed to senior citizens and retirees as offering “guaranteed returns” between 5.5% to 8.5%. The advertisements, however, did not disclose the L-Bonds’ illiquidity and complexity, or GWG’s deteriorating financial condition. In addition, brokers selling L-Bonds earned commissions as high as 8% for each sale, which created a conflict of interest when financial advisors recommended L-Bonds. GWG’s prospectuses and supplements for the L-Bonds noted, among other things, that: (i) the L-Bonds “may be considered speculative”; (ii) “L-Bonds are only suitable for persons with substantial financial resources and with no need for liquidity in this investment”; (iii) the L-Bonds involved a “high degree of risk,” including the risk of losing the entire investment; and (iv) there was “substantial doubt” about GWG’s ability to continue as a going concern for the next twelve months following the filing of the 2020 Form 10-K. On January 15, 2022, GWG suspended its sales of L-Bonds and stopped making planned interest or principal payments on its outstanding L-Bonds to investors. Other broker-dealers that have faced similar adversity over selling L-Bonds include but are not limited to Prosper Wealth Management, Center Street Securities, Western International Securities, Inc., Emerson Equity LLC, Arete Wealth Management, Independence Capital Co., Inc., Lifemark Securities Corp., Aegis Capital Corp., American Trust Investment Services, NI Advisors, Cape Securities Inc., and Centaurus Financial.
How to Recover Investment Losses From GWG L-Bonds
If you have purchased GWG L-Bonds through any broker-dealer and suffered losses, do not hesitate to contact our office at 800-556-3526 or complete our contact form for a free consultation as you may have a viable FINRA arbitration claim against the broker-dealers that sold you the GWG L-Bonds. We work on a contingency fee basis to try to recover losses. In other words, if we do not obtain a recovery, you do not owe us any legal fees. Act before time runs out on your claim.