GWG Holdings Lawsuit Investigation Update

GWG Lawsuit Investigation GWG L Bonds, Liquidity Bonds – Update on Investigation Concerned about an investment in GWG Holdings (GWGH) offerings?  GWGH, a financial services firm, has been selling L Bonds since January 2012 under the name “Renewable Secured Debentures”. These debt securities were re-named “L Bonds” in January 2015 and in 2020, the company launched a new offering called the Liquidity Bond 2020, constituting secured debt of GWG Holdings, Inc. On March 31, 2021 GWG reportedly notified the SEC of its  inability to file its 2020 annual report within the prescribed time period because it required additional time to complete its financial statements and related disclosures. The company received a letter on April 16, 2021 from the Nasdaq’s listing qualifications department notifying the company that it was not in compliance with a listing rule that requires the timely filing of annual financial reports, according to filings with the SEC.  While the letter states that the company is required to submit a plan to Nasdaq to regain compliance with the rule within 60 calendar days from the date of the letter, it apparently has no immediate effect on the listing or trading of GWGH’s common stock. If the plan is accepted, then it can grant GWG up to 180 calendar days from the due date of the annual report to regain compliance. The company notes that it will file its report prior to the 60-day deadline and regain compliance with the Nasdaq continued listing requirements. GWG Holdings Inc. (GWGH) finances its portfolio of life insurance assets through the sale of alternative investment products, according to its website. Although these products are touted as offering potentially higher yields than other investment assets that are correlated with the traditional stock and bond markets, they may come at a much greater risk to investors. GWG Investment Offerings: What is an L Bond? An L bond is an alternative investment vehicle that attempts to provide a high yield for a lender in exchange for bearing the risk that an insurance policy premium or benefits may not be paid. An L bond is an unrated life insurance bond that is used to finance the purchase and premium payments of life insurance settlement contracts purchased in the secondary market. L Bonds were publicly offered and sold on a continuous basis in 2014, 2017 and again in 2020 for a total of $4 billion in principal. The most recent offering will reportedly run on a continuous basis through June 2023, according to the prospectus. The GWG L Bond prospectus notes, “An investment in the L Bonds involves significant risks, including the risk of losing your entire investment, and may be considered speculative.” GWG L bonds are illiquid investments, and the shareholders cannot sell them on the secondary market. Shareholders must wait until the bonds mature to redeem the principal amount and they cannot redeem the bond before the maturity date or the death or disability of the original policyholder. According to its prospectus, if GWG agrees to redeem the bond for any other reason, the bondholder will be charged a penalty of 6%. According to financial statements filed with the SEC in November 2020, the company warns “it may not be able to sell additional L Bonds on terms as favorable to the Company as past transactions or in quantities sufficient to fund all of the Company’s operating requirements.” Further, GWGH may not be able to obtain additional borrowing under existing debt facilities or new borrowings with other third-party lenders. GWG issues new series of  “Liquidity” Bonds The company issued two new series of L bonds in December 2020 called  (the “Liquidity Bonds”). The Liquidity Bonds are currently being offered and sold to accredited investors as Reg D private placement investments. The company says the Liquidity Bonds will be issued as part of the Company’s strategy to expand its exposure to a portfolio of loans collateralized by cash flows from illiquid alternative assets. Six months after the issuance date of a Liquidity Bond, the holder may elect to exchange the Liquidity Bond, (at the beginning of each month and upon 30 days’ prior written notice to the Company) for that number of shares of the Company’s common stock. According to Market Watch, the company’s stock closed yesterday at $6.98, down -20.68% in the past 12 months.  Potential Lawsuits to Recover Investment Losses Unfortunately, many investors are not fully aware of the problems and risks associated with illiquid, high risk, private placement investments such as GWG L Bonds (Liquidity Bonds). Alternative investments are complex and inherently risky products. Compared to traditional investments, such as stocks, bonds and mutual funds, these investments are significantly more complex and often better suited for sophisticated and institutional investors. Another problem often associated with these recommendations is the high sales commissions brokers typically earn for selling them– as high as 15%.  Brokers have an obligation to make investment recommendations that are consistent with their clients risk tolerance, net worth, investment objectives and experience in the market. In many cases, the high sales commission may provide some brokers with enough incentive to make unsuitable investment recommendations. Broker dealers are required to perform adequate due diligence on any investment they recommend and to ensure that all recommendations are suitable for the investor. Firms that fail to do so, may be held responsible for any losses in a FINRA arbitration claim. If you are concerned about your investment in GWG L Bonds, the securities attorneys at The White Law Group may be able to help you.  Please call the offices at 888-637-5510 for a free consultation. The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois. For more information on The White Law Group and its representation of investors in FINRA arbitration claims, visit https://www.whitesecuritieslaw.com.        » GWG Holdings Inc class action, GWG Holdings Inc complaint, GWG Holdings Inc debentures, GWG Holdings Inc exchange, GWG Holdings Inc information, GWG Holdings Inc investigation, GWG Holdings Inc lawsuit, GWG Holdings Inc life insurance, GWG Holdings Inc losses, GWG Holdings Inc market, GWG Holdings Inc price, GWG Holdings Inc risks, GWG Holdings Inc value, GWG Holdings investment losses, GWG L bonds, GWG L Bonds illiquid, GWG L Bonds lawsuit, GWG L Bonds recovery, GWG L Bonds Shareholders, GWG Life LLC, GWG Renewed Secured Debentures class action, Liquidity Bond, Liquidity Bonds 2020, featured by top securities fraud attorneys, The White Law GroupConcerned about an investment in GWG Holdings (GWGH) offerings? 

GWGH, a financial services firm, has been selling L Bonds since January 2012 under the name “Renewable Secured Debentures”. These debt securities were re-named “L Bonds” in January 2015 and in 2020, the company launched a new offering called the Liquidity Bond 2020, constituting secured debt of GWG Holdings, Inc.

On March 31, 2021 GWG reportedly notified the SEC of its inability to file its 2020 annual report within the prescribed time period because it required additional time to complete its financial statements and related disclosures.

The company received a letter on April 16, 2021 from the Nasdaq’s listing qualifications department notifying the company that it was not in compliance with a listing rule that requires the timely filing of annual financial reports, according to filings with the SEC.

While the letter states that the company is required to submit a plan to Nasdaq to regain compliance with the rule within 60 calendar days from the date of the letter, it apparently has no immediate effect on the listing or trading of GWGH’s common stock. If the plan is accepted, then it can grant GWG up to 180 calendar days from the due date of the annual report to regain compliance.

The company notes that it will file its report prior to the 60-day deadline and regain compliance with the Nasdaq continued listing requirements.

GWG Holdings Inc. (GWGH) finances its portfolio of life insurance assets through the sale of alternative investment products, according to its website. Although these products are touted as offering potentially higher yields than other investment assets that are correlated with the traditional stock and bond markets, they may come at a much greater risk to investors.

GWG Investment Offerings: What is an L Bond?

An L bond is an alternative investment vehicle that attempts to provide a high yield for a lender in exchange for bearing the risk that an insurance policy premium or benefits may not be paid. An L bond is an unrated life insurance bond that is used to finance the purchase and premium payments of life insurance settlement contracts purchased in the secondary market.

L Bonds were publicly offered and sold on a continuous basis in 2014, 2017 and again in 2020 for a total of $4 billion in principal. The most recent offering will reportedly run on a continuous basis through June 2023, according to the prospectus.

The GWG L Bond prospectus notes, “An investment in the L Bonds involves significant risks, including the risk of losing your entire investment, and may be considered speculative.”

GWG L bonds are illiquid investments, and the shareholders cannot sell them on the secondary market. Shareholders must wait until the bonds mature to redeem the principal amount and they cannot redeem the bond before the maturity date or the death or disability of the original policyholder. According to its prospectus, if GWG agrees to redeem the bond for any other reason, the bondholder will be charged a penalty of 6%.

The company warns “it may not be able to sell additional L Bonds on terms as favorable to the Company as past transactions or in quantities sufficient to fund all of the Company’s operating requirements,” according to financial statements filed with the SEC in November 2020. Further, GWGH may not be able to obtain additional borrowing under existing debt facilities or new borrowings with other third-party lenders.

GWG issues new series of  “Liquidity” Bonds

The company issued two new series of L bonds in December 2020 called  (the “Liquidity Bonds”). The Liquidity Bonds are currently being offered and sold to accredited investors as Reg D private placement investments. The company says the Liquidity Bonds will be issued as part of the Company’s strategy to expand its exposure to a portfolio of loans collateralized by cash flows from illiquid alternative assets. Six months after the issuance date of a Liquidity Bond, the holder may elect to exchange the Liquidity Bond, (at the beginning of each month and upon 30 days’ prior written notice to the Company) for that number of shares of the Company’s common stock.

According to Market Watch, the company’s stock closed yesterday at $6.98, down -20.68% in the past 12 months. 

Potential Lawsuits to Recover Investment Losses

Unfortunately, many investors are not fully aware of the problems and risks associated with illiquid, high risk, private placement investments such as GWG L Bonds (Liquidity Bonds).

Alternative investments are complex and inherently risky products. Compared to traditional investments, such as stocks, bonds and mutual funds, these investments are significantly more complex and often better suited for sophisticated and institutional investors.

Another problem often associated with these recommendations is the high sales commissions brokers typically earn for selling them– as high as 15%.  Brokers have an obligation to make investment recommendations that are consistent with their clients risk tolerance, net worth, investment objectives and experience in the market.

In many cases, the high sales commission may provide some brokers with enough incentive to make unsuitable investment recommendations.

Broker dealers are required to perform adequate due diligence on any investment they recommend and to ensure that all recommendations are suitable for the investor. Firms that fail to do so, may be held responsible for any losses in a FINRA arbitration claim.

If you are concerned about your investment in GWG L Bonds, the securities attorneys at The White Law Group may be able to help you.  Please call the offices at 888-637-5510 for a free consultation.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois.

For more information on The White Law Group and its representation of investors in FINRA arbitration claims, visit https://www.whitesecuritieslaw.com.

 

 

 

 

Former Alliance Global Advisor Michael Shillin Lawsuit Investigation

Former Alliance Global Advisor Michael Shillin Lawsuit Investigation, featured by top securities fraud attorneys, The White Law GroupMichael Shillin Reportedly Barred after Allegations of Misrepresentations

Are you concerned about your investments with Michael Shillin, of Altoona, WI? If so, the securities attorneys at the White Law Group may be able to help you to recover financial losses.

The White Law Group is currently representing investors in securities claims involving financial advisor Michael Shillin and the liability his former employers may have for failure to properly supervise him.

The Financial Industry Regulatory Authority (FINRA) reportedly barred former advisor Michael Shillin (CRD#: 5927156, Altoona, WI) last December from working in the securities industry after he purportedly refused to appear for on-the-record testimony.

FINRA was reportedly investigating Shillin after his member firm, Alliance Global Partners, filed an amended Form U5 stating that a client had complained that “Shillin made misrepresentations relating to the amount and source of expected dividends in his account,” according to a Letter of Acceptance, Waiver and Consent.

Alliance Global Partners, Shillin’s most recent member firm, filed a Form U5 stating that Shillin had allegedly resigned while under investigation.

The Form U5 is the Uniform Termination Notice for Securities Industry Registration. Broker-dealers, investment advisers, or issuers of securities must use this form to terminate the registration of an individual in the appropriate jurisdictions and/or self- regulatory organizations.

The firm reported in the Form U5 that Shillin created and altered documents and emails “designed to show the existence of a long term care (LTC) insurance policy” that allegedly did not exist. Alliance Global further alleged that Shillin “directly making a series of payments to the ‘beneficiary’ of the non-existent LTC policy,” and Alliance Global stated that Shillin made “material misstatements and provid[ing] falsified/altered documents to Firm personnel during the investigation in an apparent effort to explain the situation.”

For FINRA’s full findings see FINRA Case # 202006822610.

Shillin’s broker report indicates that he was registered with Alliance Global Partners in Altoona, WI from 2018 until  October 2020. Previously, he was registered with Raymond James in Chippewa Falls, WI for 4 years until he was discharged for “failure to follow firm directive regarding the payment of client CPA fees,”  according to his broker report.

Shillin was apparently the owner of a private label entity for financial services called Shillin Wealth Management since May 2018, according to his broker record.

Michael Shillin reportedly has 27 customer complaints on his broker record, with two still pending.

Filing a Complaint against your Brokerage Firm

Brokerage firms are required to adequately supervise their advisors. They must ensure they are complying with FINRA rules.

When brokers abuse client accounts and conduct transactions that violate securities laws, such as misrepresentation, the brokerage firm they are working with may be liable for investment losses. Brokerage firms that fail to monitor the business activities of their employees may be liable for investment losses due to negligent supervision for the misconduct of their employees.

The brokerage firms can be held responsible for any losses in a FINRA arbitration claim if it is determined that they failed to properly supervise their agent.

If you have suffered losses investing with Michael Shillin, the securities attorneys at The White Law Group may be able to help you. For a free consultation with a securities attorney, please call (888) 637-5510.

The foregoing information, which is all publicly available, is being provided by The White Law Group.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois. For more information, please visit our website, www.whitesecuritieslaw.com.

 

 

 

 

Pacific Oak Strategic Opportunity REIT Decline in Value

Pacific Oak Strategic Opportunity REIT Decline in Value, featured by top securities fraud attorneys, The White Law GroupPacific Oak Strategic Opportunity REIT Shareholders may have Claims

The White Law Group is investigating potential securities claims involving the liability that brokerage firms may have for recommending Pacific Oak Strategic Opportunity REIT to investors. 

Pacific Oak Strategic Opportunity REIT (formerly KBS Strategic Opportunity REIT II), a non-traded REIT closed its initial public offering on November 20, 2012.

Last October Pacific Oak Strategic Opportunity REIT II shareholders approved a merger into Pacific Oak Strategic Opportunity REIT. The REIT was designed to capitalize on “the dislocation, lack of liquidity, and government intervention” that exists in the commercial real estate markets by acquiring a diverse portfolio of opportunistic investments in discounted debt and distressed equity assets.

On December 4, 2020, the board of directors of Pacific Oak Strategic Opportunity REIT approved an estimated value per share of the Company’s common stock of $9.68. This is a decline from the previous year’s NAV of $10.25 per share.

According to Central Trade and Transfer, a secondary market for illiquid investments, shares of Pacifc Oak are currently listed to sell for just $6.50 per share. This may indicate losses for investors as the original offering price for the REIT was $10 per share.

The Trouble with Non-Traded REITs

The trouble with non-traded REITs  is that they are complex and inherently risky products.

Broker dealers are required to inform clients of the risks associated with investment recommendations and to ensure that those recommendations are suitable for the investor in light of the investor’s age, risk tolerance, net worth, and investment experience. Firms that fail to do so, may be held responsible for any losses.

Lack of liquidity is often problematic for many investors.  Investors looking to sell often have difficulty finding a buyer, and can suffer significant losses on the sale.

Investigating Potential Claims

If you have suffered losses investing in Pacific Oak Strategic Opportunity REIT,  please contact The White Law Group at 888-637-5510 for a free consultation.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois. For more information on the firm, visit www.WhiteSecuritiesLaw.com.

 

 

Northstar Healthcare Income Inc. Continues to Decline in Value

Northstar Healthcare Income Inc. Continues to Decline in Value, featured by top securities fraud attorneys, The White Law GroupRecovery of Investment Losses in NorthStar Healthcare Income Inc.

NorthStar Healthcare Income was reportedly formed to acquire, originate and asset manage a diversified portfolio of equity, debt and securities investments in healthcare real estate, according to its website. The company launched in February 2013, and through November 8, 2018, reportedly raised total gross proceeds of $2 billion, including $225.3 million through its distribution reinvestment plan.

The White Law Group has been investigating claims involving the REIT since December 2017, when it reduced its distribution rate to 3.31% from 6.67%.  It has continued a decline in NAV since 2017 when it was valued at $8.50 per share. 

NorthStar Healthcare has announced a revised estimated net asset value of $3.89 per share, as of June 30, 2020. The REIT’s previous NAV was $6.25 per share, as of June 30, 2019, according to recent filings with the Securities and Exchange Commission.

The REIT notes that as of June 30, 2020, the estimated value of the REIT’s 75 healthcare properties was $1.6 billion, compared with an aggregate cost, including purchase price, deferred costs, and other assets of nearly $2.2 billion.

The estimated value of the REIT’s joint venture investments was $389.3 million, compared with a total equity contribution of $511.1 million.

In total, the estimated value of NorthStar Healthcare’s healthcare properties, joint venture investments and healthcare debt investment was approximately $2.06 billion, an approximate 25 percent decrease in value compared to the total cost.

The valuation  is reportedly based on the estimated value of NorthStar Healthcare’s assets, less the estimated value of its liabilities, divided by the number of shares outstanding as of June 30, 2020.

In April 2020, the board suspended all repurchases under the share repurchase program in order to preserve capital and liquidity. Distributions were suspended in February 2019.

Unfortunately for  investors, this new NAV share price represents a significant loss in value.

The White Law Group continues to investigate the liability that brokerage firms may have for unsuitably recommending that investors invest in Northstar Healthcare Income Inc.

Brokerage firms have an obligation to recommend only investments that are suitable for the investor in light of the investor’s age, investment experience, net worth, and investment objective.  If a brokerage firm unsuitably recommends an investment they can be held responsible for the losses in a FINRA arbitration claim.

FINRA’s arbitration forum is a way for investors to resolve disputes if a broker or brokerage firm makes an unsuitable investment recommendation or fails to adequately disclose the risks associated with an investment. 

If you are concerned about investment losses in Northstar Healthcare Income Inc., the securities attorneys at the White Law Group may be able to help you, Please call 888-637-5510 for a free consultation.  The White Law Group is a national securities fraud, securities arbitration and investor protection law firm with offices in Chicago, Illinois. For more information on the firm please visit www.whitesecuritieslaw.com.

 

CIM Real Estate Finance Trust & Cole REITs Merger

CIM Real Estate Finance Trust & Cole REITs Merger, featured by top attorneys, The White Law Group

CIM Real Estate Finance Trust & Cole REITs Merger

CIM to Merge with Cole Office & Industrial REIT and Cole Credit Property Trust V

Have you suffered losses investing in CIM Real Estate Finance Trust? If so, the securities attorneys at The White Law Group may be able to help you.

Unfortunately for investors it appears that many financial advisors/brokerage firms that sold non-traded REITs such as CIM Real Estate Finance Trust Inc., may have understated or misrepresented the risks and liquidity problems.

CIM Real Estate Finance Trust has announced plans to move forward with a merger involving Cole Office & Industrial REIT (CCIT III) and Cole Credit Property Trust V, after reports this week that one of the REITs in the original proposal, Cole Office & Industrial REIT (CCIT II), would be acquired by Griffin Capital Essential Asset REIT.

In August we reported plans for four Cole REITs to merge, but after the “go-shop” period, CCIT II decided to instead go with an offer from Griffin Capital Essential Asset REIT in a $1.2 billion stock-for-stock transaction.

CCIT III and CCPT V stockholders will vote at special meetings of stockholders scheduled to be held virtually on December 17, 2020.

Risks of Non-Traded REITs

Real estate investment trusts (REITs) are complex and inherently risky products. Unfortunately for investors, many REITs have taken a hit due to the Covid-19 global pandemic, and some have suspended distributions during this  uncertain time.

Compared to traditional investments, such as stocks, bonds and mutual funds, REITs are significantly more complex and often better suited for sophisticated and institutional investors.

Another problem often associated with REIT recommendations is the high sales commissions brokers typically earn for selling  REITs – as high as 15%.  In addition to the high risks, non-traded REITs often lack liquidity. Investors looking to sell these investments often have difficulty finding a buyer, and if they are able to find one can suffer significant losses on the sale.

Filing a Complaint Against your Brokerage Firm

Prior to making recommendations to an individual investor, brokerage firms are required by the Financial Industry Regulatory Authority (FINRA) to disclose all the risks of an investment. Recommendations should only be made if the investment is suitable for an individual investor given their age, investment objections, investment experience and risk tolerance.

Brokerage firms that do not perform adequate due diligence on an investment and/or make unsuitable recommendations can be held accountable for investment losses through FINRA arbitration.

High commissions could be a motivating factor for unscrupulous financial advisors to sell non-traded REITs regardless of whether the investment is in line with the client’s investment objectives and profile.  Moreover, the total commissions and expenses make it difficult for the REIT to perform in line with the market.

If you are concerned about your investment in CIM Real Estate Finance Trust or another Cole REIT , you may be able to file a complaint against your brokerage firm. Please call the securities attorneys of The White Law Group at 888-637-5510 for a free consultation.

The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Franklin, Tennessee.

For more information on The White Law Group, visit https://www.whitesecuritieslaw.com.