Episode · GWG Holdings L Bonds
Betting on Death
Bonds backed by other people's life insurance, paying up to 8.5 percent, sold by thousands of advisers. $1.6 billion was outstanding when the company went bankrupt.
Cold Open
What if you could earn up to 8.5 percent a year, and the investment was backed by life insurance policies? That was the pitch for GWG Holdings' L Bonds. Thousands of advisers sold them. Most of the buyers, prosecutors say, were retirees. Then the company went bankrupt with $1.6 billion of these bonds outstanding. I'm the Angry Attorney. This is Greed Exposed.
The Product
GWG bought life insurance policies from older people who no longer wanted them, kept paying the premiums, and collected when the insured person died. That's called a life settlement. To pay for it, GWG sold L Bonds to the public: two to seven years, 5.5 to 8.5 percent, $25,000 minimum. The bonds were unrated. There was no market to sell them. Getting out early was up to GWG, with a fee. The prospectus itself said they were only suitable for people with substantial financial resources.
Who Sold It
GWG said its bonds were sold through about 145 independent broker-dealers and almost 5,000 financial advisers. The prospectus allowed up to 8 percent of the money raised to go to the selling firms. The longer the bond, the bigger the commission. Over time, GWG moved the money away from life insurance and into loans tied to illiquid assets connected to its own chairman.
The Trick
In May 2026, a federal jury convicted GWG's former chairman of securities fraud, wire fraud and conspiracy. Prosecutors proved he made up a $141 million debt supposedly owed to a shell company he controlled, and used it to divert more than $150 million. The Justice Department says the bankruptcy caused more than $1 billion in losses to retail investors. As of this episode, he has not been sentenced.
The Brokers
And the people who sold the bonds? Starting in 2024, the SEC brought a string of cases against brokerage firms and representatives over L Bond sales, for recommending them without a reasonable basis, including to people at or near retirement. In one case, customers had between 16 and 72 percent of their liquid net worth in L Bonds. In another, the SEC alleges a broker told customers the bonds were guaranteed. In April 2026, Texas regulators ordered a broker-dealer and two agents to make refunds after finding sales that broke the firm's own limits.
Where the Money Is Now
GWG filed for bankruptcy on April 20, 2022. When the plan took effect in August 2023, the bonds were canceled and replaced with interests in a wind-down trust that can't be sold or transferred. Bondholders are waiting to see what, if anything, comes back.
Close
An unrated bond with no market isn't a CD and isn't a savings account. If you were told it was safe, if you were near retirement, or if a big part of your savings went into one company's bonds, the people who sold it to you had rules to follow. Some of them didn't. No one else listened. We will.
Sources
Every fact in this story comes from the public record. Read it for yourself:
- GWG Holdings L Bond prospectus supplement (March 31, 2020)
- GWG Holdings annual report (Form 10-K, 2020)
- GWG Holdings bankruptcy filing (Form 8-K, April 2022)
- GWG Wind Down Trust letter (August 2023)
- U.S. Attorney, S.D.N.Y.: indictment (November 4, 2025)
- U.S. Attorney, S.D.N.Y.: conviction (May 7, 2026)
- SEC Order, Release No. 34-100615 (July 29, 2024)
- SEC complaint alleging “guaranteed” sales pitch (July 29, 2024)
- SEC Order, Release No. 34-103675 (August 11, 2025)
- Texas State Securities Board order (April 7, 2026)
A charge or complaint is an allegation, not a finding, unless we say a court, regulator or jury decided it.