Quick Summary (Investor Snapshot)

• Estimated Distribution: In the latest joint status report from the GWG Wind Down Trust and GWG Litigation Trust, the Litigation Trustee estimates that pending settlements, together with settlements already approved by the Bankruptcy Court, could collectively result in a distribution of approximately 3.78% to former GWG bondholders on account of their prepetition bond holdings.
• What This Means in Dollars: For every $100,000 invested, bondholders are estimated to receive just $3,780.

For most investors, this latest filing does not change the bigger picture: the GWG bankruptcy process is still unlikely to deliver meaningful compensation, and many investors should continue evaluating potential claims against the brokerage firms and financial advisors that sold GWG L Bonds.

What Should GWG L Bond Investors Do Now?

For many investors, the central legal question is no longer just what the bankruptcy case will pay.

It is whether the brokerage firm or financial advisor that sold the GWG L Bonds can be held accountable.

At Iorio Law PLLC, we have recovered millions for GWG L Bond clients on a contingency-fee basis (no recovery, no fee) by pursuing FINRA arbitration claims against the brokerage firms that recommended and sold these high-risk, illiquid securities.

GWG L Bonds were sold nationwide through brokerage firms that earned high commissions for recommending these illiquid, high-risk products. As our prior reporting and investigation page explain, firms involved in GWG L Bond sales had duties to:

• perform reasonable due diligence
• recommend only suitable investments
• disclose material risks and conflicts
• comply with best-interest obligations

Many investors were retirees or conservative investors seeking income. If they were sold GWG L Bonds as safe, appropriate, or income-producing without adequate risk disclosure, they may have viable claims through FINRA arbitration.

We outline these issues in detail in our GWG L Bond Investor Recovery Center.

Those claims are separate from the bankruptcy case.

That distinction is important.

A bankruptcy distribution does not prevent an investor from pursuing a claim against the broker-dealer or advisor that sold the investment.

Why Investors Should Not Wait

The newest status report may lead some investors to think they should simply wait for a bankruptcy check and move on.

That could be a mistake.

A projected 3.78% distribution is still a very small recovery. And waiting on the bankruptcy process does not necessarily stop the clock on potential legal claims against brokerage firms.

If you purchased GWG L Bonds through a financial advisor or broker-dealer, now is the time to review:

• when the bonds were purchased
• what representations were made
• whether GWG’s business model change was sufficiently and accurately disclosed
• whether liquidity, concentration, and issuer risk were fully explained
• whether the recommendation was suitable for your age, objectives, and risk tolerance
• which firm and registered representative were involved

Contact Iorio Law PLLC

Iorio Law PLLC is at the forefront of the GWG L Bond investigation. We are a New York-based securities arbitration and investor-advocacy law firm representing clients nationwide in cases involving stockbroker misconduct, unsuitable investment recommendations, and violations of FINRA and SEC rules.

The firm’s founder and managing attorney, August M. Iorio, has already recovered approximately $4 million for GWG L Bond investors through FINRA arbitration claims and continues to represent clients nationwide in claims against brokerage firms that sold the product.

If you purchased GWG L Bonds through Western International Securities, Centaurus Financial, Emerson Equity, Aegis Capital Corp., Arete Wealth Management, Ausdal Financial Partners, or Kingswood Capital— or any other broker-dealer — contact us for a free, confidential case evaluation.

Our firm is dedicated to holding brokerage firms accountable and helping investors recover their losses.

📞 Call: (646) 330-4624
📧 Email: info@iorio.law
📍 Location: New York, NY | Representing DST Investors Nationwide
🖊️ Free Case Review: Contact Form

Frequently Asked Questions

What is the latest estimated recovery for GWG L Bond investors?

According to the latest joint status report, the Litigation Trustee estimates that pending settlements together with already approved settlements could result in a distribution of approximately 3.78% to former GWG bondholders, or about $3,780 per $100,000 invested.

Is 3.78% the final GWG bankruptcy payout?

Not necessarily. The report describes this as an estimate based on current assumptions and pending matters. Actual distributions may be higher or lower.

When will GWG L Bond investors receive distributions?

The timing remains uncertain. The report indicates that additional settlement approvals and other unresolved issues still affect the distribution process.

Can GWG investors still pursue claims outside the bankruptcy?

Yes. In many cases, investors may still be able to pursue claims against the brokerage firms or financial advisors that sold GWG L Bonds through FINRA arbitration.

Why are so many GWG investors looking at FINRA arbitration?

Because bankruptcy recovery appears very limited, many investors are evaluating whether their brokers failed to perform due diligence, failed to disclose material risks, or made unsuitable recommendations.

If you invested in this property, you were likely sold on the promise of a “stable,” “income-producing,” and “tax-advantaged” replacement property. However, recent data reveals a different reality.

Iorio Law PLLC is actively investigating One on 4th DST as part of our broader investigation into Versity/Crew Enterprises DSTs. Investor outcomes depend heavily on truthful disclosures and broker-dealer due diligence. When those fail, investors have the right to seek financial recovery.

What’s New: Q4 2025 Results Show Meaningful Losses

The Sponsor’s Q4 2025 investor update paints a concerning picture of the property’s financial health. For the fourth quarter of 2025:

• One on 4th LeaseCo, LLC reported a net loss of ($292,008).
• The Trust reported a net loss of ($1,673,262).

These losses are significant. DST investors typically rely on the Trust’s net cash flow (or reserve usage) for regular distributions and principal preservation. When a Trust runs deep quarterly losses, investors face heightened risks of continued distribution suspensions, further asset deterioration, and potential forced restructuring.

“Strong Occupancy” Does Not Guarantee Investor Safety

The Q4 2025 update notes that the property ended the quarter at 98.9% occupancy and describes the asset as “stabilized.” However, the update also acknowledges that operating performance remains heavily pressured by elevated costs—particularly property taxes, insurance, and utilities—which remain consistently above initial underwriting assumptions.

The bottom line: High occupancy does not equal sustainable distributable cash flow. For DST investors, success requires sufficient cash flow after debt service, taxes, insurance, property management costs, and other hidden charges.

Why the DST Structure Matters: Master Leases and the Fee Stack

One on 4th DST utilizes a master lease structure. The Trust leases the property to an affiliate (One on 4th LeaseCo, LLC), and another affiliate entity serves as the property manager. Affiliate-driven structures can create inherent conflicts of interest and severely reduce transparency, leaving investors dependent on sponsor-controlled reporting across multiple related entities.

Furthermore, this offering carried a massive upfront selling-cost and fee structure. The Private Placement Memorandum (PPM) notes that WealthForge Securities, LLC served as the exclusive managing broker-dealer. Selling commissions and expenses were capped at a staggering 9.33% (including selling commissions, dealer management fees, broker-dealer allowances, wholesaling fees, and offering expenses).

High-commission alternative investments often create dangerous incentives for:

• Aggressive sales practices.
• Incomplete discussions regarding risk and liquidity.
• “Rubber-stamp” due diligence by broker-dealers who ignore sponsor red flags.

Broker-Dealer Liability: Investigating One on 4th DST Sales

Over the past several years, One on 4th DST and other Versity/Crew-sponsored investments have reportedly experienced loan defaults, declining occupancy, significant accounts payable, suspended distributions, and a distinct lack of investor communication.

When transparency disappears, we ask the critical questions: Where did the offering proceeds actually go? Were reserve accounts properly maintained? Were related-party payments fully disclosed?

The Crux of the Claims: A Missed 2020 Fraud Lawsuit

At the heart of the claims against the selling broker-dealers is a glaring failure of due diligence, disclosure, and supervision.

Specifically, our investigation focuses on the failure of brokerage firms to detect and disclose that the principals of Versity/Crew, Blake Wettengel and Tanya Muro, were named as defendants in a lawsuit filed in November 2020. This lawsuit contained severe allegations that the principals defrauded investors by misappropriating syndicated funds for their own personal benefit.

For a broker-dealer, uncovering a prior fraud and misappropriation lawsuit against a sponsor’s principals is “Due Diligence 101.” Recommending a high-risk, illiquid DST like One on 4th without disclosing this massive red flag to retail investors represents a severe potential breach of regulatory obligations.

Reg BI, Suitability, and Failure to Supervise

Through FINRA arbitration, One on 4th DST investors may have strong claims against the brokerage firms that sold them these investments. Potential claims include:

• Failure to conduct reasonable due diligence into sponsor controls, related-party transactions, and prior litigation involving the sponsor’s principals.
• Misrepresentations and omissions regarding the safety, distribution risks, and the true track record of the sponsor.
• Regulation Best Interest (Reg BI) and Suitability violations, including over-concentrating investor portfolios in highly illiquid alternative investments.
• Failure to supervise brokers who aggressively marketed DSTs as “safe” or “stable” while downplaying or entirely omitting known structural risks and legal red flags.

“Bridge Equity” and Structural Risks

Additionally, the PPM describes the use of “bridge equity” to close the acquisition before sufficient DST interests were actually sold. It contains warnings that, in certain default scenarios, proceeds from the sale of DST interests could be demanded to satisfy obligations not directly tied to the property. Many retail investors were never meaningfully warned about this proceeds-flow risk.

Practical Next Steps for One on 4th DST Investors

If you invested in One on 4th DST and are currently dealing with suspended distributions or limited communications, it is time to protect your legal rights.

1. Gather Your Documents: Locate your subscription paperwork, the PPM, investor reports, email correspondence with your advisor, and account statements.
2. Identify the Seller: Note the specific advisor who recommended the investment and the broker-dealer firm they were registered with at the time of the sale.
3. Evaluate FINRA Arbitration Options: In many DST fraud and negligence cases, financial recovery is pursued directly against the selling broker-dealer. Brokerage firms carry meaningful insurance and represent a collectible source of recovery.

Contact Iorio Law PLLC Today

Iorio Law PLLC is actively investigating financial losses connected to Versity/Crew-sponsored DSTs, including One on 4th DST. If you are concerned about your suspended distributions, the lack of transparency, or the safety of your principal investment, we can evaluate whether a FINRA arbitration claim is appropriate for you.

📞 Call: (646) 330-4624
📧 Email: info@iorio.law
📍 Location: New York, NY | Representing DST Investors Nationwide
🖊️ Free Case Review: Contact Form

If you invested in a Delaware Statutory Trust (DST) and recently learned that the sponsor or property entity has filed for bankruptcy, you are not alone. Over the past several years, numerous real estate DST programs have collapsed due to rising interest rates, operational failures, refinancing defaults, sponsor mismanagement, and fraud.

As investors in Delaware Statutory Trusts (DSTs), many of you turn to these vehicles for their tax advantages, such as 1031 exchanges, and potential steady income from real estate holdings like senior living facilities. But what happens when your DST sponsor, like Inspired Healthcare Capital Holdings, LLC, files for Chapter 11 bankruptcy?

The bankruptcy filing can feel overwhelming—but it does not mean your legal options are over. In many cases, bankruptcy is only the beginning of the recovery process.

Here’s what every DST investor needs to know.

What Does Bankruptcy Mean for DST Investors?

When a DST files for Chapter 11, it aims to reorganize debts while continuing operations. However, this can significantly impact investors:

• Automatic Stay: The bankruptcy halts collections, foreclosures, or lawsuits against the debtor, protecting assets but potentially delaying distributions to investors.
• Creditor Status: As a beneficial owner in the DST, you may be treated as an unsecured creditor, meaning recoveries depend on the reorganization plan. Funds available for distribution could be limited after administrative expenses and secured debts are paid.
• Potential Outcomes:
  • Reorganization: The DST might emerge stronger, but with diluted investor interests.
  • Liquidation: Assets like senior living properties could be sold, leading to partial recoveries.
  • No Recovery: In worst-case scenarios, unsecured creditors receive nothing.

This does not automatically eliminate investor rights. Instead, bankruptcy often confirms what many investors already suspected:

• The investment failed to perform as promised
• Distributions stopped or were artificially supported
• Refinancing assumptions were unrealistic
• Risk disclosures were downplayed or misrepresented

Most importantly, the bankruptcy filing frequently triggers investigation into how the DST was sold in the first place.

Your Options: Beyond Waiting on Bankruptcy Court

Many investors assume they must wait in bankruptcy court. That is often a mistake.

Bankruptcy Recovery (Sponsor Side)

Participating in the bankruptcy as a creditor is one route—file a proof of claim, attend hearings, or join a creditors’ committee. Bankruptcy cases typically involve:

• Senior lenders
• Secured creditors
• Trade vendors
• Internal restructuring

DST investors often receive little to no recovery because they sit at the bottom of the capital stack.

A more proactive option? Holding your broker or financial advisor accountable through FINRA arbitration.

FINRA Arbitration (Broker Liability)

Brokers and advisors have a duty to recommend suitable investments, conduct due diligence, and disclose risks. In DST cases like those from Inspired Healthcare Capital, common issues include:

• Unsuitability: Recommending high-risk DSTs to conservative investors seeking stable income or tax deferral.
• Misrepresentations: Downplaying risks such as illiquidity, market volatility in senior living, or sponsor financial instability.
• Omissions: Failing to disclose material information, such as sponsor risk or prior sponsor misconduct.   
• Failure to Disclose Conflicts: Not revealing conflicts of interest, like commissions from selling DST interests, or inadequate vetting of the sponsor.
• Breach of Fiduciary Duty: Advisors must act in your best interest; failing to monitor the investment post-purchase could be grounds for a claim.

FINRA arbitration is a streamlined, cost-effective alternative to court, often resolving in 12-18 months. Successful claims can recover principal losses, lost income, legal fees, and punitive damages. Unlike bankruptcy, arbitration targets the brokerage firm, which may have deeper pockets.

Your claim is against the brokerage firm and financial advisor, not the bankrupt sponsor.

This is where meaningful recoveries frequently occur.

You can, and often should, pursue both avenues of recovery.

Key Steps to File a FINRA Claim

1. Gather Documentation: Subscription agreements, closing statements, investor updates, account statements, and communications with your advisor.
2. Assess Statute of Limitations: FINRA claims generally must be filed within six years of the purchase or discovery of the issue.
3. Consult a Specialist: Work with a securities arbitration firm like Iorio Law PLLC to evaluate your case. We’re currently reviewing Inspired Healthcare Capital DSTs and Versity Investments, LLC / Crew Enterprises, LLC-sponsored DSTs for potential claims.
4. File the Statement of Claim: Detail the misconduct and damages sought.

In recent similar cases, investors have recovered millions from brokers for unsuitable real estate securities. With Inspired’s bankruptcy fresh, now is the time to act before evidence fades or limitations expire.

Timing Matters: FINRA Eligibility Deadlines

FINRA imposes strict filing deadlines:

• Generally six years from the date of purchase
• Shorter deadlines may apply depending on state law claims

If your DST was purchased in 2019–2021, your eligibility window may already be closing.

Waiting for bankruptcy resolution can permanently destroy your right to recover from the brokerage firm.

Case Study: Inspired Healthcare Capital’s Filings Highlight Risks

Investors should be aware that Inspired Healthcare Capital (IHC) and its affiliates have officially filed for Chapter 11 bankruptcy protection in the Northern District of Texas. This legal action covers not only IHC but also its affiliated Delaware Statutory Trusts (DSTs) and private placement funds. The filings confirm serious financial woes: distributions have been suspended, capital raises halted, and concerns regarding solvency and transparency are mounting. If your portfolio includes these assets, your capital is at heightened risk. The following IHC entities have filed for protection:

• Inspired Senior Living of Appleton DST
• Inspired Senior Living of Arlington Heights DST
• IHC Ashbrook DST
• Inspired Senior Living of Athens DST
• Inspired Senior Living of Augusta DST
• Inspired Senior Living of Brookhaven DST
• Inspired Senior Living of Carson Valley DST
• IHC – Candle Light Cove DST
• Inspired Senior Living of Chesterfield DST
• Inspired Senior Living of Dartmouth DST
• Inspired Senior Living of Delray Beach DST
• Inspired Senior Living of Dunedin DST
• Inspired Senior Living of Eatonton DST
• Inspired Senior Living of Eugene DST
• Inspired Senior Living of Fort Myers DST
• Inspired Senior Living of Grapevine DST
• Inspired Senior Living of Hamilton DST
• Inspired Senior Living of Lake Orion DST
• Inspired Senior Living of Largo DST
• Inspired Senior Living of Las Vegas DST
• Inspired Senior Living of Melbourne DST
• Inspired Senior Living of Mequon DST
• Inspired Senior Living of Naperville DST
• Inspired Senior Living of New Braunfels DST
• Inspired Senior Living of North Haven DST
• IHC – Peachtree DST
• Inspired Senior Living of Pinellas Park DST
• Inspired Senior Living of Reno DST
• Inspired Senior Living of Round Rock DST
• Inspired Senior Living of San Marcos DST
• Inspired Senior Living of St. Petersburg DST
• Inspired Healthcare Capital Income Fund LLC
• Inspired Healthcare Capital Income Fund 2 LLC
• Inspired Healthcare Capital Income Fund 3 LLC
• Inspired Healthcare Capital Income Fund 5, LLC
• Inspired Healthcare Capital Income Fund 5 Notes, LLC
• Inspired Healthcare Capital Liquidity Fund, LLC
• Inspired Healthcare Capital Fund LP
• IHC Security Income Fund LLC
• IHC Development Fund III, LLC
• IHC Development Fund IV, LLC

Iorio Law PLLC is investigating the sales practices and due diligence of Emerson Equity LLC; Berthel, Fisher & Company Financial Services, Inc.; Newbridge Securities Corporation; Landolt Securities, Inc.; Dempsey Lord Smith LLC; and KCD Financial Inc. in recommending and selling these risky securities.

Case Study: Versity Investment and Crew Enterprise DSTs

Iorio Law PLLC is representing individuals who have approximately $25 million in beneficial interests in various DSTs sponsored by Versity Investments, LLC and/or Crew Enterprises, LLC (formerly Versity Invest, LLC), including:

• Hayworth Tanglewood, DST
• One on 4^th DST
• Apex South Creek, DST
• Vintage, DST
• The Walk, DST
• The Element, DST
• Wolf Run, DST
• 4^th & J, DST
• Oakbrook, DST
• Tailor Lofts, DST  
• Shadowglen, DST
• The Nine, DST
• Campus Walk, DST

In addition, we are representing investors who own other securities issued by Versity, including:

• Versity Income Property Notes
• Versity Income Fund I, LLC
• Versity Income Fund II, LLC
• The Ridge TIC
• AW Provo Evolution, LLC
• University Park Berkeley, LLC

Iorio Law PLLC is investigating whether broker-dealers such as Great Point Capital, LLC, Coastal Equities, Inc. (now Realta Equities, Inc.), Capulent LLC, Cabin Securities, Inc., Aurora Securities disclosed to investors that the principals of the Sponsor had previously been alleged to have defrauded investors by diverting and misappropriating syndicated funds from DSTs.  

You Are Not Alone

At Iorio Law PLLC, we represent DST investors nationwide whose financial assets and savings were placed into unsuitable real estate programs. We focus exclusively on investor recovery and securities arbitration.

If your DST has filed for bankruptcy and you are wondering what comes next, now is the time to act.

Protect Your Investment Today

Speak With a DST Arbitration Attorney

If you invested in a DST that is now in bankruptcy and want to explore your recovery options:

📞 Call: (646) 330-4624
📧 Email: info@iorio.law
📍 Location: New York, NY | Representing DST Investors Nationwide
🖊️ Free Case Review: Contact Form

Current filings, arbitration claims, and sponsor disclosures point to serious financial irregularities, including misappropriation of funds, suspended distributions, and significant due diligence failures by the broker-dealers who sold these high-risk investments.

These developments are part of a growing series of Versity Investments lawsuits and Crew Enterprises lawsuit updates involving multiple DST offerings nationwide.

Investor Alert: If you invested in Hayworth Tanglewood DST or other Versity-sponsored offerings, your recovery window may be limited. Contact Iorio Law PLLC immediately for a case evaluation.

Property Profile: What is Hayworth Tanglewood DST?

Hayworth Tanglewood DST is a Delaware Statutory Trust formed to acquire a Class A, mid-rise multifamily residential property located in Houston, Texas. 

According to the offering documents:

• Property Type: Class A mid-rise multifamily community
• Property Address: 1414 Wood Hollow Drive, Houston, Texas 77057
• Units: 246 residential units
• Net Rentable Area: Approximately 351,000 square feet
• Site Size: Approximately 3.08 acres
• Occupancy at Acquisition: Approximately 94% leased
• Acquisition Date: June 30, 2022
• Purchase Price: $105.5 million
• Loan Amount: $48 million
• Offering Date: July 27, 2022
• Total Equity Raised: $76,767,365
• Total Offering Price: $124,767,365
• Loan-to-Offering Price Ratio: Approximately 38.47%
• Sponsor: Versity Invest, LLC

The offering was marketed aggressively to 1031 exchange investors.

Why Is Hayworth Tanglewood DST Under Investigation?

The investigation focuses on allegations that the sponsors—specifically principals Blake Wettengel and Tanya Muro—engaged in misconduct that jeopardized investor capital. Furthermore, the broker-dealers who recommended these products may have failed their regulatory duties to vet the sponsors before selling the DSTs to retirees and accredited investors.

Key Allegations and Red Flags:

• Suspended Distributions: Investors have reported halted monthly distributions, a primary indicator of cash flow distress and potential foreclosure risk.
• Misappropriation of Funds: Civil litigation alleges that syndicated investor proceeds were diverted, commingled with other property funds, or used for unauthorized bonuses and personal expenditures.
• Declining Valuation: Market reports in 2025 suggest the property value has fallen below the 2022 acquisition price.
• Prior Knowledge: Public lawsuits filed as early as 2020 alleged similar misconduct by the same principals, raising questions about why broker-dealers continued to sell these products in 2022 and/or fail to disclose the allegations.

The Role of Broker-Dealers: Liability for Due Diligence and Disclosure Failures

Investment firms are not merely order takers; they are gatekeepers. Under Regulation Best Interest (Reg BI) and FINRA Rule 2111, broker-dealers have a duty to conduct reasonable due diligence.

Further, under federal and state securities laws, they have a duty to disclose all material information and not to misrepresent any material information.

Selling Firms

Upon information and belief, the following FINRA-member firms sold Hayworth Tanglewood DST:

• AAG Capital, Inc.
• Aurora Securities, Inc.
• Cabin Securities
• Capulent, LLC
• Coastal Equities, LLC (now Realta Equities, Inc.)
• Emerson Equity, LLC
• Lion Street Financial
• MSC-BD, LLC
• WealthForge Securities, LLC
• Westpark Capital, Inc.

The PPM identifies WealthForge Securities, LLC as the exclusive managing broker-dealer, with authority to re-allow commissions to participating selling firms.

Broker-dealers received:

• 6.0% selling commissions
• 0.65% dealer management fees
• 1.0% broker-dealer allowance
• Additional wholesaling compensation

Total upfront selling compensation and offering expenses could exceed 9%.  The high sales commissions and fees can have a negative impact on the profitability of the property and the DST structure.

Potential Violations

Iorio Law is investigating whether these firms:

1. Ignored Red Flags: Failed to investigate the litigation history of Wettengel and Muro (Versity/Crew principals).
2. Disclosure Failures: Failed to disclose to investors that the principals of Versity/Crew, Wettengel and Muro, were previously alleged to have defrauded investors by diverting their funds away from the properties being purchase for syndication and used for undisclosed and improper purposes.
3. Overlooked Conflicts: Failed to analyze sponsor structure and conflicts of interest that involved the principals owning the management company and other affiliated entities, which allowed them to allegedly divert money away from the property.
4. Unsuitable Recommendations: Sold illiquid, high-risk DSTs to conservative investors, retirees, or those requiring stable income.

Sponsor Structure: Conflicts of Interest

The Hayworth Tanglewood offering documents (PPM) reveal a complex web of affiliate-controlled entities designed to extract fees regardless of property performance.

• Asset Management Fees: 1.0% of gross revenue to Versity.
• Property Management Fees: 2.5% of monthly gross revenue to Book and Ladder, LLC (affiliate).
• Bonus Rent: The “Master Tenant” (affiliate) participated in operating income.

These arrangements were not negotiated at arm’s length, creating a direct conflict between the sponsor’s desire for fees and the investors’ need for returns.

Allegations of Misappropriation by Versity, Crew Enterprises, Wettengel, and Muro

Arbitration filings and civil litigation allege that Blake Wettengel and Tanya Muro, principals of Versity Investments and later Crew Enterprises, engaged in:

• Diversion of syndicated investor proceeds
• Commingling of property funds
• Unauthorized transfers
• Payment of improper bonuses
• Use of DST capital for unrelated investments and personal expenditures

Importantly, these allegations pre-date the Hayworth offering. Public lawsuits filed in November 2020, and June 2021 alleged substantially similar misconduct involving the same principals and DST syndication structures.

Hayworth Tanglewood Performance Issues and Distribution Suspensions

According to investor claims and sponsor communications:

• Hayworth Tanglewood DST has experienced declining occupancy levels
• Distributions have been suspended for extended periods
• Sponsor communications regarding property performance have been limited
• Market valuations in 2025 reportedly reflected values below the 2022 acquisition price

Suspended distributions are often a warning sign of deteriorating cash flow and heightened foreclosure risk in leveraged DST structures.

What Hayworth Tanglewood Investors Should Do Now

If you invested in Hayworth Tanglewood DST or any Versity-sponsored DST, you may have claims for:

• Violation of Regulation Best Interest (Reg BI) (including failure to conduct reasonable due diligence)
• Material Misrepresentations and Omissions
• Breach of Fiduciary Duty
• Negligence and Failure to Supervise

These claims are typically pursued through FINRA arbitration, which allows investors to seek recovery directly from broker-dealers — even when sponsors face insolvency.

Iorio Law PLLC Represents DST Investors Nationwide

Iorio Law PLLC is a securities arbitration law firm representing investors nationwide. We specialize in recovering losses from unsuitable alternative investments and broker-dealer misconduct.

📞 Call: (646) 330-4624
📧 Email: info@iorio.law
📍 Location: New York, NY | Representing DST Investors Nationwide
🖊️ Free Case Review: Contact Form

No recovery, no fee. Contact us today to review your legal options.

Most recently, Kingswood Capital Partners, LLC has been hit with significant sanctions for its failure to monitor the sale of these high-risk products.

If you’ve suffered losses in GWG L Bonds, visit our firm’s GWG L Bond Recovery Center to learn more and explore your potential legal options.

FINRA Letter of Acceptance, Waiver, and Consent No. 2020068830202 (Kingswood Capital Partners, LLC)

On Friday, December 12, 2025, the Financial Industry Regulatory Authority (FINRA) finalized a Letter of Acceptance, Waiver, and Consent (AWC No. 2020068830202) regarding Kingswood Capital Partners, LLC related to the sale of GWG L Bonds. Without admitting or denying the findings, Kingswood consented to a censure and a $150,000 fine.

FINRA found that between March 2019 and June 2019, Kingswood Capital failed to reasonably supervise a former registered representative who recommended GWG L Bonds and other illiquid alternative investments to senior investors.

FINRA’s findings detailed alarming cases of unsuitable recommendations and overconcentration:

• The 81-Year-Old Investor: A Kingswood representative recommended an 81-year-old client invest $96,000 into GWG L Bonds, despite the client having an annual income of less than $50,000. This single investment resulted in an astounding 96% of the client’s liquid net worth being concentrated in a high-risk, illiquid product.
• The 66-Year-Old Investor: In a similar case, the representative recommended an $88,000 investment in GWG L Bonds to a 66-year-old client with a moderate risk tolerance. This placed over 35% of the client’s liquid net worth into a single speculative product.

FINRA determined that Kingswood Capital violated FINRA Rules 3110 (supervision) and 2010 (standards of commercial honor) by failing to maintain a supervisory system designed to prevent such extreme concentration in illiquid products.

FINRA determined that Kingswood Capital violated FINRA Rules 3110 (supervision) and 2010 (standards of commercial honor and principles of trade) for failure to establish and maintain a supervisory system or written procedures reasonably designed to detect and prevent such extreme concentration in illiquid products.

Read the full AWC here: FINRA AWC – Kingswood Capital

Recent Arbitration Claim Filed by Iorio Law

Iorio Law PLLC has recently filed a new FINRA arbitration statement of claim against Kingswood Capital on behalf of an investor who suffered significant losses from GWG L Bonds.

The claim includes allegations that Kingswood Capital, through its brokers, recommended that the Claimant borrow money via a securities-based loan against newly deposited funds to invest $125,000 into three speculative, high-risk, illiquid, and high-commission alternative investments and/or private placement offerings.

The claim alleges the firm’s actions constituted unsuitable and misleading investment recommendations, as the brokers leveraged client funds to purchase high-risk GWG L Bonds that were fundamentally incompatible with the investor’s financial goals. Furthermore, the claim details how Kingswood Capital misrepresented and omitted material facts by failing to disclose the speculative nature of these securities and the mounting financial instability of the issuer.

Central to the claim is Kingswood Capital’s failure to conduct reasonable due diligence regarding GWG L Bonds and GWG Holdings, Inc. Proper diligence would have revealed significant “red flags” long before the company’s collapse. These allegations drive our effort to hold the firm accountable for the client’s devastating financial losses.

GWG L Bonds & Recovery Options

For most investors, the bankruptcy court offers little hope. The GWG Wind Down Trust currently projects a nominal recovery of only around 2.7% to 3.45% of the original principal.

To put this in perspective: For every $1,000 invested, a bondholder may only see a return of about $26.94 to $34.46.

Furthermore, there is no confirmed date for when these fractional payments will begin, with current projections suggesting that investors will remain empty-handed until at least later in 2026. Given these “pennies on the dollar” projections, FINRA arbitration has become the most viable path for meaningful recovery.

Arbitration allows you to pursue claims against your brokerage firm—rather than the bankrupt issuer—for the sale of unsuitable investments. These claims are separate from the bankruptcy liquidation and focus specifically on broker misconduct.

Stay informed by checking our GWG L Bond Update Blog for the latest news on trust distributions and regulatory actions.

About Iorio Law PLLC

Iorio Law PLLC is at the forefront of the GWG L Bond investigation. We are a New York-based securities arbitration and investor-advocacy law firm representing clients nationwide in cases involving stockbroker misconduct, unsuitable investment recommendations, and violations of FINRA and SEC rules.

The firm’s founder and managing attorney, August M. Iorio, has already recovered approximately $4 million for GWG L Bond investors through FINRA arbitration claims and continues to represent clients nationwide in claims against brokerage firms that sold the product.

If you purchased GWG L Bonds through Kingswood Capital — or any other broker-dealer — contact us for a free, confidential case evaluation.

Our firm is dedicated to holding brokerage firms accountable and helping investors recover their losses.

📞 Call: (646) 330-4624
📧 Email: info@iorio.law
📍 Location: One World Trade Center, 85th Floor, New York, NY 10007
🖊️ Free Case Review: Contact Form

Recent developments—including loan defaults, suspended distributions, allegations of misappropriation of investor funds, and multiple Versity Investments lawsuits and Crew Enterprises lawsuits—raise significant concerns for investors and for the broker-dealers who recommended this offering.

If you invested in Apex South Creek DST, contact us for a free consultation.

📞 Call: (646) 330-4624
📧 Email: info@iorio.law
📍 Location: One World Trade Center, 85th Floor, New York, NY 10007
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What Is Apex South Creek DST?

Apex South Creek DST is a Delaware Statutory Trust formed to acquire a newly built Class A multifamily apartment community located at 3060 Southcreek Blvd., Orlando, Florida.

The offering was created and managed by Versity Investments, LLC (formerly NB Private Capital) and affiliated entities now operating under Crew Enterprises, LLC.

Broker-dealers marketed Apex as a stable, income-producing 1031 investment. However, at the time of the offering, the principals of Versity Investments, LLC were already alleged to have diverted and misappropriated syndicated funds away from other DSTs. Further, recent developments demonstrate that the investment has become deeply distressed and may have been unsuitable for many investors.

Who Sold Apex South Creek DST?

Based on information obtained to date, and upon information and belief, Apex South Creek DST was sold to investors by:

• Brian Nelson of Emerson Equity, LLC
• Don Linzer of Coastal Equities, Inc. (now Realta Equities, Inc.) and Great Point Capital LLC

These firms and representatives are believed to have sold Apex South Creek to retail investors, including 1031-exchange clients who relied on their brokers’ recommendations and due diligence.

Broker-dealers earned substantial commissions—often 5% to 7%—for selling interests in Apex South Creek DST. Those commissions created strong incentives to push high-risk DST offerings regardless of suitability.

Emerson Equity served as the managing broker-dealer for many Versity-sponsored DSTs, meaning it played a central role in supervising the due-diligence process and coordinating sales through participating broker-dealers.

Coastal Equities (now Realta Equities) has been associated with multiple high-risk alternative investment sales, including other DSTs that later experienced distress.

Upon information and belief, Coastal Equities and Great Point Capital were some of the largest sellers of DSTs sponsored by Versity Investments.

Other Broker-Dealers That Sold Versity-Sponsored DSTs:

Multiple other broker-dealers have sold Versity Investments / Crew Enterprises-sponsored DST offerings, including:

• Purshe Kaplan Sterling Investments
• Lion Street Financial
• Stonecrest Capital Markets
• Westpark Capital, Inc.
• IBN Financial Services, Inc.
• Dempsey Lord Smith, LLC
• WealthForge Securities, LLC
• AAG Capital, Inc.
• Cape Securities, Inc.
• Aurora Securities, Inc.
• Capulent, LLC

These firms appear across various Versity-sponsored DSTs, such as The Walk, Vintage, Hayworth Tanglewood, One on 4^th, Nine, and others that are now experiencing distress, suspended distributions, or litigation.

The presence of such a wide network of selling broker-dealers underscores the industry-wide distribution of Versity-sponsored DSTs and the potential systemic due-diligence failures related to these offerings.

Distributions to Investors Have Been Suspended:

Multiple investors report that Apex South Creek DST distributions have been suspended, leaving investors without expected monthly income.

The suspension occurred despite the sponsor’s earlier “yield enhancement” marketing, which temporarily increased stated rent to investors using sponsor-funded payments—a red flag indicating that actual property cash flow was likely insufficient to support stated distributions.

Suspended distributions often correlate with impaired property operations and may significantly reduce investors’ ability to recover principal upon sale or refinance.

They are a major indicator of financial distress and are highly relevant to Reg BI and suitability analyses for broker-dealers that recommended the DST.

Apex South Creek Faces Severe Loan Defaults and Multimillion-Dollar Judgments:

Recent court filings show that Apex South Creek is in significant financial distress, including:

$47 Million Judgment Against Versity Invest

Lenders obtained a judgment of approximately $47 million against Versity Invest, LLC, the guarantor for the Apex South Creek financing.

Lender Lawsuit Against Project-Level Borrower

The lenders are also pursuing the project-level borrower, Apex South Creek IB, LLC, another Versity-controlled entity.

Key Allegations From Court Filings

According to sworn lender allegations:

• Original principal across the notes totaled $42 million.
• Maturity dates were extended three times (ultimately to May 18, 2024).
• No interest payments have been made since November 2023.
• Apex South Creek has allegedly been in default for months.
• Outstanding principal as of March 31, 2025 is $34,114,356.
• Total amounts due now exceed $42,953,401.

The lenders also allege that Versity misappropriated syndication proceeds, meaning investor-raised capital was allegedly diverted for improper uses—forcing the lenders to “involuntarily fund” part of the Apex South Creek transaction.

This allegation mirrors claims made in other Versity Investments lawsuits and Crew Enterprises lawsuits, strengthening concerns that the problems at Apex are not isolated.

Investors Sue Apex South Creek DST: Claims of Willful Misconduct and Fraud

Separately, Apex South Creek DST investors have filed litigation in the Delaware Court of Chancery:

Apex South Creek DST, et al., 2025-0990-SEM (Del. Ch.)

The investor petition seeks to remove the DST trustee, citing:

• Willful misconduct
• Fraud
• Gross negligence
• Breach of fiduciary duty

A DST trust-removal action is exceptionally rare and typically occurs only when investors believe the sponsor or trustee engaged in serious wrongdoing.

Serious Allegations Against Versity, Crew Enterprises, Blake Wettengel, and Tanya Muro:

Apex South Creek is not the only DST sponsored by Versity/Crew facing problems.

Multiple lawsuits—including the KHCA/Knights Hill, Nelson brothers, and other DST investor actions—allege that: Blake Wettengel and Tanya Muro through Versity Investments, Versity Invest, and Crew Enterprises diverted and misappropriated syndicated proceeds, “commingled funds,” paid themselves unapproved bonuses, and extracted excessive “partnership expenses.”

In several DSTs, these issues have allegedly contributed to:

• Suspended distributions
• Loan defaults
• Massive deficits in operating and reserve accounts
• Risk of foreclosure
• Investor capital impairment or loss

These allegations form the basis of several ongoing legal actions—making Apex South Creek part of a larger pattern of sponsor misconduct.

Why Broker-Dealers May Be Liable for Apex South Creek DST Losses:

Broker-dealers who recommended Apex South Creek DST may be liable for investor losses if they:

• Failed to conduct adequate due diligence on Versity Investments or Crew Enterprises
• Failed to detect and disclose material information about Versity, Crew, Wettengel, and Muro, including regarding past allegations of defrauding investors and misappropriating investors’ syndicated proceeds
• Ignored red flags about the sponsor’s financial condition
• Recommended an illiquid, high-risk DST to unsuitable investors
• Misrepresented stability, income expectations, or the true risks of the investment
• Violated Regulation Best Interest (Reg BI) or FINRA Rules 2111, 3110, and 2210

Due diligence failures are especially significant given the now-public allegations of:

• Diversion of investor funds
• Sponsor cash-flow manipulation
• Repeated problems across multiple Versity-sponsored DSTs
• Financial distress predating the suspension of distributions
• Severe governance failures and trustee misconduct claims

Given that allegations of misappropriation surfaced as early as 2020, a reasonable due-diligence inquiry would have identified material red flags requiring enhanced scrutiny

FINRA arbitration is often the most effective way for investors to recover losses against the broker-dealers involved.

What Apex South Creek Investors Should Do Now:

If you purchased Apex South Creek DST—or are researching the latest Versity Investments lawsuit update or Crew Enterprises lawsuit update—you may have strong legal claims.

You may be entitled to recover losses for:

• Unsuitable recommendations
• Misrepresentations and omissions
• Failure to conduct due diligence
• Reg BI violations
• Failure to supervise
• Breach of fiduciary duty

You do not need to sue the sponsor; your claims are typically against the broker-dealer in FINRA arbitration.

Iorio Law PLLC Represents Versity-Sponsored DST Investors Nationwide:

Iorio Law PLLC is a national securities arbitration firm representing investors in claims involving DSTs, private placements, alternative investments, and broker-dealer misconduct.

Our attorneys have recovered tens of millions of dollars for investors harmed by unsuitable investment recommendations involving high-risk, complex investment products.

If you invested in Apex South Creek DST or any other Versity-sponsored DST, contact us today to review your legal rights.

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The case, FINRA Case No. 24-02575, filed on December 5, 2024, and settled on August 14, 2025, underscores the growing scrutiny of broker-dealer supervision failures and the ongoing risks of financial advisor misconduct among professional athletes.

The Allegations: Misappropriation, Misrepresentation, and Unsuitable Advice

According to Jones’s Statement of Claim, Williams engaged in misappropriation, unsuitable asset allocation, misrepresentations, and improper outside business activities while managing Jones’s portfolio at Merrill Lynch’s Boca Raton, Florida branch. Jones sought approximately $16 million in damages, alleging that Merrill Lynch failed to properly supervise its employee and ignored red flags that could have prevented the theft.

Court and regulatory filings allege that Williams used his position as Jones’s trusted advisor to transfer funds from Jones’s accounts without authorization. According to a June 2024 arrest report cited by ESPN, Williams allegedly siphoned $1.56 million through 133 separate transactions, and another $1.03 million through a laundering scheme involving Octivia Monique Graham, a Georgia-based woman Jones had never met. The funds were allegedly spent on luxury cars, jewelry, airline tickets, hotels, and strip clubs.

Williams was arrested and charged with first-degree organized fraud and first-degree grand theft, both punishable by up to 30 years in prison. He was released on $1 million bond and is awaiting trial.

FINRA Bars Isaiah Williams from the Securities Industry

In April 2025, FINRA permanently barred Williams after he refused to cooperate with its investigation into the allegations.

According to FINRA’s findings (Case No. 2024082549801), Williams violated FINRA Rules 8210 and 2010 by failing to provide documents and information requested in connection with his firm’s internal review. Merrill Lynch’s Form U5 filings disclosed that Williams “voluntarily resigned while under internal review into allegations of misappropriation, unsuitable asset allocation, misrepresentations, and an improper business activity.”

BrokerCheck records show that Williams, who entered the industry in 2013, worked briefly for UBS Financial Services, Inc. before joining Merrill Lynch in 2017. His record reflects multiple customer complaints, including:

• May 2024: A customer alleged misrepresentation and improper outside business activity between March 2019 and May 2024.
• July 2025: A separate client alleged that Williams failed to act in the client’s best interest and recommended an unsuitable asset allocation strategy. The customer seeks $3.5 million in damages.

Merrill Lynch’s $9.5 Million Settlement

Although Merrill Lynch denied liability, the $9.5 million settlement reflects the seriousness of the allegations and the firm’s potential exposure to supervisory liability under FINRA Rule 3110.

Broker-dealers are legally obligated to supervise their registered representatives and prevent misconduct that can harm investors. When a firm fails to detect or respond to red flags—such as unauthorized transfers, undisclosed outside business activities, or complaints from high-net-worth clients—it can be held responsible for resulting losses.

This case also illustrates a recurring theme in FINRA arbitration: broker-dealer supervision failures involving trusted financial advisors who misuse personal relationships. Many athletes and entertainers rely heavily on their advisors’ expertise and integrity, often granting them access to personal accounts. When that trust is breached, the damage can be both financial and personal.

Athlete Investment Fraud: A Growing Concern

Professional athletes are frequent targets of financial fraud due to their high earnings and limited investment experience. Reshad Jones, who made over $56 million during his 10-year NFL career, joins a growing list of athletes who have pursued claims against major financial institutions for supervisory failures.

The intersection of sports and finance has drawn increased regulatory attention. FINRA and the SEC have both emphasized the duty of brokerage firms to identify red flags, monitor for misappropriation, and prevent outside business activities that create conflicts of interest.

According to Iorio Law PLLC’s founder August M. Iorio, a New York-based securities arbitration attorney:

“Cases like this highlight why supervision is the cornerstone of investor protection. When brokerage firms fail to detect unauthorized transfers or ignore clear warning signs, investors—whether athletes, retirees, or small business owners—pay the price. FINRA arbitration gives victims a forum to recover those losses and hold firms accountable.”

Legal and Regulatory Standards at Issue

Broker-dealers and financial advisors are subject to several key obligations under FINRA and SEC rules, including:

• Regulation Best Interest (Reg BI): Advisors must place clients’ interests ahead of their own when making investment recommendations.
• FINRA Rule 2111 (Suitability): Brokers must recommend investments suitable for the client’s financial situation and objectives.
• FINRA Rule 3110 (Supervision): Firms must establish and maintain systems to detect and prevent misconduct.
• FINRA Rule 2010: Registered persons must observe high standards of commercial honor and just and equitable principles of trade.
• FINRA Rule 8210: Registered persons must cooperate with FINRA investigations or face permanent industry bars.

Williams’s conduct violated several of these rules, and Merrill Lynch’s settlement demonstrates the consequences firms face when they fail to meet their supervisory responsibilities.

What Investors Can Learn from the Case

This case offers critical lessons for all investors:

1. Check Your Advisor’s Record: Use FINRA BrokerCheck to review disciplinary history, complaints, and employment background.
2. Monitor Account Activity: Regularly review account statements for unfamiliar transactions.
3. Beware of Over-Personal Relationships: Excessive trust or personal entanglement can lead to blurred professional boundaries.
4. Act Quickly if You Suspect Misconduct: FINRA arbitration claims are time-sensitive—typically within six years of the misconduct.

If you suspect unauthorized transactions or unsuitable advice, consult an experienced securities arbitration attorney immediately. Investors may recover losses through FINRA arbitration, even when the advisor is barred or facing criminal charges.

About Iorio Law PLLC

Iorio Law PLLC is a national securities arbitration law firm based in New York, NY, representing investors nationwide in claims against brokerage firms and financial advisors. The firm, led by August M. Iorio, has helped investors recover nearly $100 million in losses through FINRA arbitration, mediation, and litigation.

Mr. Iorio has secured landmark victories, including the first FINRA arbitration award against Robinhood for its 2021 meme-stock trading restrictions and millions in recoveries for GWG L Bond investors.

The firm’s practice focuses exclusively on investor recovery, including cases involving:

• Misappropriation and unauthorized trading
• Misrepresentation and omissions
• Unsuitable investment recommendations and Reg BI violations
• Breach of fiduciary duty and failure to supervise
• Improper outside business activities and “selling away”

Free Case Evaluation: Recovering from Financial Advisor Misconduct

If you have suffered losses due to financial advisor misconduct, you may have a claim through FINRA arbitration.

At Iorio Law PLLC, we work on a contingency-fee basis—you pay no legal fees unless we recover money for you. Our attorneys conduct thorough investigations, analyze brokerage records, and pursue justice through arbitration or settlement negotiations.

📞 Call: (646) 330-4624
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🖊️ Free Case Review: Contact Form

Free & confidential case evaluation. No recovery, no fee.

• GWG Bankruptcy Settlements Approved: Wind Down Trust to Pay Pennies on the Dollar — Investors Must Act Now (January 2026) (January 19, 2026)

• GWG L Bonds Update (November 2025): Payout Timeline, Lawsuits, Settlements & What Investors Can Expect Now (November 18, 2025)

Original Post:

The GWG Wind Down Trust filed its latest status report on August 15, 2025, with the U.S. Bankruptcy Court, providing new details for GWG L Bond investors. Liz Freeman, the GWG Wind Down Trustee, also released the trust’s recent financial statements. These reports cover the Trust’s activities for the quarter and year ending June 30, 2025.

Visit Iorio Law PLLC’s GWG L Bond Investor Recovery Center for the latest information about our firm’s investigation.

Key Takeaways from the GWG Wind Down Trust Report (June 30, 2025):

• The GWG Wind Down Trust reports only $5 million in net assets.
• The Trust has completed the sale of its final shares of Beneficient and has no further tangible assets to liquidate.
• Final court approval for the $50.5 million settlement with Brad Heppner and Beneficient is not expected until at least January 2026.

These points paint a clear picture of the limited recovery expected from the bankruptcy proceedings.

When Will GWG L Bond Investors Receive Payouts?

According to court filings, the GWG Wind Down Trust estimates that the total distribution from the four settlements will be between 2.694% and 3.446% of the approximately $1.67 billion in pre-petition GWG L Bond holdings. This means investors can expect to receive about $2.69 to $3.45 for every $100 invested.

A significant portion of these settlement proceeds is subject to court approval by the District Court in the Northern District of Texas. While a preliminary approval hearing is scheduled for September 24, 2025, final approval is not anticipated until at least January 2026. As a result, GWG L Bond investors will likely need to wait until 2026 to receive a distribution from the Trust.

Options for Additional Recovery Through FINRA Arbitration

With the projected bankruptcy recovery being minimal and not expected until 2026, FINRA arbitration claims against the selling broker-dealers remain the most viable way for investors to recover meaningful losses. These firms, which earned high commissions, had a legal duty to their customers.

Iorio Law PLLC, led by attorney August M. Iorio, has already recovered more than $3.5 million for GWG L Bond investors nationwide.  Iorio Law PLLC represents clients on a contingency-fee basis—no recovery, no fee.

Why FINRA Arbitration is the Best Path for Recovery:

• GWG L Bond investors have a 90% win rate in FINRA arbitration claims, which includes a recent award against Arete Wealth Management.

• FINRA and the SEC have sanctioned over 15 different selling broker-dealers and financial advisors who sold these risky securities, including Emerson Equity, Tony Barouti, and Western International Securities.

See Also: GWG L Bond Investors Alert: DOJ Charges Former GWG CEO with Securities Fraud — What This Means for Investors

Why Choose Iorio Law PLLC?

Mr. Iorio has extensive knowledge of the GWG situation. His firm represents clients on a contingency-fee basis, which means there is no fee unless you recover. His client reviews highlight his effective communication and commitment to putting clients’ needs first.

Client Testimonials:

• ★★★★★  “I had never sought legal advice before and was very apprehensive. Mr. Iorio did an outstanding job negotiating on my behalf on a settlement from the ongoing GWG case. From the beginning, he was thorough and honest about the process and expectations going forward. In short, he was a man of his word and negotiated a fair settlement. I would absolutely recommend Mr. Iorio and utilize his services again if the need arose.” Brian B.
• ★★★★★ “I contacted Mr. Iorio regarding my GWG L Bonds problem. I found him efficient, fast, and very knowledgeable in handling my case. He was very prompt and quickly sorted out the details to resolve my issue in an extremely short period of time. I highly recommend him. He is truly a professional and kept me informed every step of the way.” Mahmood A.
• ★★★★★ “I am pleased to recommend Iorio Law PLLC. Mr. Iorio represented me in a GWG matter. He did an extraordinary job on my behalf. He is knowledgeable, responsive, and extremely skilled. I received an excellent outcome because of Mr. Iorio’s representation on my behalf. I highly recommend him and would not hesitate to use him for any future legal matter.” – Henry L.
• ★★★★★ “August represented my associate and me in the GWG arbitration and accomplished what we thought was impossible. He successfully tracked down the elusive owner of a firm—who had sold the company shortly after our issue arose—and secured a fair settlement for us. Another law firm had already told me the case would be a ‘waste of their time,’ but Attorney Iorio took it on and was a bulldog.” – Allan F.

Explore Your Options: Free Case Evaluation

If you purchased GWG L Bonds through Emerson Equity, Western International Securities, Arete Wealth Management, Aegis Capital Corp—or any other broker-dealer—contact us for a free, confidential case evaluation. Our firm is dedicated to holding brokerage firms accountable and helping investors recover their losses.

📞 Call: (646) 330-4624
📧 Email: info@iorio.law
📍 Location: One World Trade Center, 85th Floor, New York, NY 10007
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This latest award adds to a growing trend: investors have now prevailed in 18 out of 20 GWG L Bond cases that have proceeded to a final FINRA hearing—an 90% success rate, far exceeding the historical average for investor claims.

If you purchased GWG L Bonds through Arete Wealth Management—or any other broker-dealer—visit our GWG L Bond Investor Recovery Center for more information.

Repeat Offender: Arete Wealth Management’s GWG L Bond Liability

In February 2024, another FINRA arbitration panel in St. Louis ordered Arete Wealth Management to pay $75,000 plus interest to a GWG L Bond investor (FINRA Arbitration Award No. 22-01337). Both cases underscore the firm’s failure to meet its regulatory obligations when recommending these speculative, illiquid, and high-commission bonds.

Arete Wealth Management’s compliance issues are not new. In 2012, the firm was fined and censured by FINRA for approving a private securities offering to customers without conducting adequate due diligence (2012 FINRA Enforcement Action). The same type of due diligence failure is at the heart of many GWG L Bond claims.

January 2025 Lawsuit: SEC Alleges Fraudulent Practices, Cover-up, and Inadequate Compliance Practices

In January 2025, the U.S. Securities and Exchange Commission filed a federal lawsuit against Arete Wealth Management, Arete Wealth Advisors, LLC, Joey Miller, Jeff and Randy Larson, and General Counsel and Chief Compliance Officer UnBo (Bob) Chung. The lawsuit alleges that Mr. Miller and brothers Jeff and Randy Larson defrauded dozens of investors by soliciting them to purchase unapproved stock in a sham company. This company was run by an individual who had served several years in prison for conspiracy to commit securities fraud and other crimes.

According to the SEC’s complaint, CCO Chung knowingly approved the sale of these shares even after being informed that the individual controlling the stock was a convicted felon. The complaint further alleges that, at the direction of Arete’s CEO, the brokers and CCO later obtained liability waivers from their advisory clients. These waivers, given to clients to whom they owed a fiduciary duty, were known to contain material misrepresentations and omissions.

The SEC’s complaint also claims that while this misconduct was occurring, Arete Wealth Management, through Mr. Chung, failed to comply with key recordkeeping requirements and maintain adequate compliance policies and procedures. The firm also allegedly failed to conduct required annual reviews of its policies for nearly four years after the SEC had already warned Mr. Chung about these deficiencies in the firm’s compliance program.

The shocking allegations, which include alleged fraudulent practices, a cover-up by firm executives, and inadequate compliance practices, reveal that Arete Wealth Management—including its CEO, General Counsel/Chief Compliance Officer, and Mr. Miller—had a practice of placing its own best interests ahead of its customers’.

A Nationwide Pattern of Broker-Dealer Failures

Iorio Law PLLC’s ongoing investigation into the sale of GWG L Bonds has uncovered a troubling pattern among many brokerage firms—not just Arete Wealth Management.

Broker-dealers were required to:

• Conduct reasonable due diligence into GWG Holdings’ financial condition and business model.
• Recommend the bonds only to suitable investors whose financial profile matched the product’s high risk and illiquidity.
• Fully and fairly disclose all material risks, including GWG’s ongoing financial instability and shift into alternative assets via The Beneficient Company Group.

For many investors, these duties were ignored. Instead, the lure of commissions—up to 8%—too often took precedence over investor protection.

Why FINRA Arbitration is the Best Path for Recovery

With GWG’s bankruptcy recovery projected at just 2.7%–3.45% of principal invested, FINRA arbitration claims against selling broker-dealers remain the most viable way for investors to recoup meaningful losses.

These claims can allege:

• Unsuitable recommendations / Reg BI violations
• Misrepresentations and omissions of material risks
• Breach of fiduciary duty
• Failure to supervise advisors who sold the bonds

Iorio Law PLLC, led by GWG recovery attorney August M. Iorio, has already recovered over $3.5 million for GWG L Bond investors nationwide. GWG L Bonds. We represent clients on a contingency-fee basis—no recovery, no fee.

GWG L Bond Investor Recovery Center

Iorio Law PLLC has been investigating the sale of GWG L Bonds for several years and has prepared a comprehensive guide for GWG L Bond investors to learn about what happened and their options going forward: GWG L Bond Investor Recovery Center.

Contact Us

If you purchased GWG L Bonds through Arete Wealth Management—or any other broker-dealer—contact us for a free, confidential case evaluation.

📞 Call: (646) 330-4624
📧 Email: info@iorio.law
📍 Location: One World Trade Center, 85th Floor, New York, NY 10007
🖊️ Free Case Review: Contact Form

We are committed to holding brokerage firms accountable and helping investors recover what they have lost.

For over three and a half years, Iorio Law PLLC has represented numerous GWG L Bond investors nationwide, recovering more than $3.5 million through FINRA arbitration against multiple brokerage firms. With the GWG bankruptcy leaving investors with mere pennies on the dollar—as little as $26.94 per $1,000 invested—these SEC settlements underscore the urgency for harmed investors to explore additional recovery through securities arbitration.

For more information, please visit our GWG L Bond Investor Recovery Center.

The SEC’s Findings Against Emerson Equity, LLC

According to the SEC’s settled order (SEC Release No. 34-103674), Emerson Equity, as GWG’s managing broker-dealer, played a central role in distributing nearly $2 billion in L Bonds to retail investors across the country. The SEC found that:

• Violated Reg BI’s Care Obligation: Emerson Equity willfully violated the customer-specific prong of Regulation Best Interest’s Care Obligation for selling GWG L Bonds to investors who had very little investment experience.
• Supervisory Failures: Emerson Equity approved the sale of GWG L Bonds, ignoring red flags, including that Tony Barouti was inputting the same information on investor suitability forms for each client regardless of their individual situations.
• Violated Reg BI’s Compliance Obligation: Emerson Equity willfully violated Regulation Best Interest’s Compliance Obligation by failing to adopt and implement written policies and procedures to comply with Regulation Best Interest. For example, Emerson Equity’s written policies and procedures relating to the Care Obligation did not provide any guidance for how to evaluate retail customers’ investment profiles.

As part of the settlement, Emerson agreed to a cease-and-desist order, a censure, and to pay civil penalties and disgorgement totaling millions of dollars.

In addition to these findings, Iorio Law PLLC is investigating Emerson Equity’s sales and supervisory practices and whether the brokerage firm breached its duties. The conduct in question, includes:

• Inadequate Due Diligence: Whether Emerson Equity failed to conduct reasonable due diligence into GWG and the L Bond offering, particularly after GWG materially changed its business model in 2018 by shifting from life settlements to alternative asset investments with The Beneficient Company Group.
• Misleading Sales Practices: Whether Emerson Equity allowed L Bond sales to continue despite red flags—including SEC investigations, multiple auditor resignations, and missed SEC filings—that signaled serious liquidity and solvency risks.
• Conflicts of Interest and Incentives: Whether Emerson Equity and its associated brokers prioritized commissions as high as 8% on L Bond sales over their customers’ best interests.
• Supervisory Failures: Whether Emerson Equity did not reasonably supervise its network of selling brokers to ensure compliance with suitability and Regulation Best Interest (Reg BI) obligations.

The SEC’s Findings Against Tony Barouti

In a separate settled order (SEC Release No. 34-103675), the SEC sanctioned Tony Barouti, a Los Angeles-based registered representative who was one of the top sellers of GWG L Bonds.

The SEC found that Barouti:

• Violated Reg BI’s Care Obligation: Willfully violated the customer-specific prong of Regulation Best Interest’s Care Obligation for selling GWG L Bonds to investors who had very little investment experience.
• Submitted Inaccurate Forms: Had a practice of completing inaccurate Investor Suitability Questionnaire forms for his clients, many of whom were at or near retirement age. The SEC found that the Investor Suitability Questionnaires for a sample of 10 customers each stated that the customer had “Extensive (10+ years)” of investment experience in all listed asset classes, including but not limited to “Options/Derivatives,” “Venture Capital,” and “Commodities.” These forms did not accurately represent the actual investment experience of these customers. At least four of the customers had very little investment experience and did not know what products constituted options, derivatives, or venture capital.

Barouti agreed to be barred from the securities industry for a period of time and to pay a combination of disgorgement, prejudgment interest, and civil penalties.

In addition to these findings, Iorio Law PLLC is investigating Tony Barouti’s sales practices. Based on conversations with dozens of Mr. Barouti’s clients, the law firm’s investigation has found that Barouti:

• Sold L Bonds Without a Reasonable Basis: Recommended GWG L Bonds to retail customers without conducting adequate due diligence into the product’s risks, liquidity constraints, and changes in GWG’s business model.
• Failed to Disclose Material Risks: Did not fully and fairly disclose the speculative nature of the bonds, the lack of direct collateralization by life insurance policies, and GWG’s deteriorating financial condition.
• Ignored Suitability Concerns: Sold L Bonds to investors—including seniors and retirees—whose investment objectives, risk tolerance, and liquidity needs were incompatible with the product.

How This Confirms What We’ve Been Saying for Years

Our GWG L Bond Investor Recovery Center has long documented how brokerage firms—including Emerson Equity—ignored glaring red flags when selling these high-risk, illiquid bonds:

• Business Model Shift: In 2018, GWG transformed into a risky alternative asset company by merging with and ceding control to The Beneficient Company Group. Many investors were never told this.
• Financial Distress: SEC filings from 2019 onward showed delayed reporting, accounting issues, and auditor resignations—warning signs any competent due diligence review would have caught.
• Ponzi-Like Use of Proceeds: GWG used investor capital to pay interest and redeem earlier bonds, masking liquidity problems.
• Default and Bankruptcy: GWG defaulted on its L Bond obligations in January 2022 and filed for Chapter 11 bankruptcy three months later.

The SEC’s findings against Emerson Equity and Barouti align directly with our own investigation and what our clients have experienced: unsuitable recommendations, material misrepresentations, and failures to supervise.

Why FINRA Arbitration Is Still the Best Path for Recovery

While the SEC’s settlements are important, they do not compensate all individual investors for their losses. Regulatory fines are paid to the government, not to the harmed customers. That’s why FINRA arbitration claims remain the most effective route to recover GWG L Bond losses.

Key points for investors:

• Separate from Bankruptcy: Arbitration claims target the brokerage firm that recommended and sold the L Bonds—not GWG Holdings itself—so they are not affected by the bankruptcy discharge.
• Strong Precedent: Iorio Law PLLC has already recovered over $3.5 million for GWG investors in arbitration claims against more than 25 different broker-dealers.
• High Win Rates: According to FINRA statistics, GWG L Bond cases have produced monetary awards in 85% of cases that went to a final hearing—nearly three times the average investor win rate.
• Time Limits Apply: FINRA claims generally must be filed within six years of the investment, and in some cases sooner.

Brokerage Firms That Sold GWG L Bonds

While Emerson Equity was the managing broker-dealer, it relied on a nationwide selling network, including:

• Centaurus Financial, Inc.
• Western International Securities, Inc.
• Aegis Capital Corp.
• Arete Wealth Management, LLC
• Lifemark Securities Corp.
• Moloney Securities Co., Inc.
• Newbridge Securities Corporation
• Coastal Equities, Inc. (now Realta Equities, Inc.)
• Cabot Lodge Securities LLC
• And many others

If your brokerage firm is on this list—or even if it is not—you may have a valid claim.

What Investors Should Do Now

If you purchased GWG L Bonds through Emerson Equity, Tony Barouti, or any other broker:

1. Gather Documentation: Collect account statements, trade confirmations, offering documents, and any written communications with your broker.
2. Act Quickly: The longer you wait, the greater the risk that your claim may be barred by time limits.
3. Get a Free Case Review: At Iorio Law PLLC, we offer free, confidential consultations and work on a contingency fee basis—no recovery, no fee.

About Iorio Law PLLC’s GWG L Bond Representation

• Experience: Representing GWG investors nationwide since 2022.
• Proven Results: Over $3.5 million recovered for GWG investors through FINRA arbitration.
• Customer Satisfaction: ★★★★★ “August represented my associate and me in the GWG arbitration and accomplished what we thought was impossible. He successfully tracked down the elusive owner of a firm—who had sold the company shortly after our issue arose—and secured a fair settlement for us. Another law firm had already told me the case would be a ‘waste of their time,’ but Attorney Iorio took it on and was a bulldog.” – Allan F.
• Leadership: Founder August M. Iorio is a Director on the Board of the Public Investors Advocate Bar Association (PIABA) and has handled more than 700 securities arbitration cases.
• Nationwide Reach: Based in New York City, representing clients in all 50 states.

Take Action

The SEC’s settlements with Emerson Equity and Tony Barouti confirm a disturbing truth: many GWG L Bond sales violated core investor protection rules. But investors will not receive compensation from these regulatory actions. To recover your losses, you must take action.

📞 Call: (646) 330-4624
📧 Email: info@iorio.law
📍 Location: One World Trade Center, 85th Floor, New York, NY 10007
🖊️ Free Case Review: Contact Form

Your fight is our fight. We are committed to holding negligent brokers accountable and helping you reclaim your financial future.

• GWG Holdings, Inc. (“GWG”) filed for Chapter 11 bankruptcy protection on April 20, 2022.
• GWG’s Chapter 11 bankruptcy plan (the “Plan”) went into effect on August 1, 2023. As part of the Plan, GWG’s assets were liquidated through the GWG Wind Down Trust.
• As of December 31, 2024, the GWG Wind Down Trust had sold nearly all its tangible assets and had only $3 million in net assets. Read more about the GWG Wind Down Trust’s latest Status Report: GWG L Bonds Update: Investor Recovery Outlook and Wind Down Trust Report (April 2025).
• The Plan also established a GWG Litigation Trust, tasked with investigating and prosecuting potential claims against third parties who may have contributed to GWG’s failure.
• In March 2025, the GWG Litigation Trust announced proposed settlements with various defendants totaling $91.3 million. The settlements are subject to court approval. Read more about the GWG Litigation Trust’s settlements: GWG Holdings L Bond Settlement: $50.5 Million Agreement Reached with Defendants Including Beneficent and Brad Heppner – What It Means for Investors.

For more information, please visit our GWG L Bond Investor Recovery Center.

How Much Will GWG L Bond Investors Receive from the Bankruptcy Settlements?

On April 30, 2025, the GWG Litigation Trustee filed a Supplemental Notice of Proposed Settlements in the United States Bankruptcy Court for the Southern District of Texas.

According to the court filing, after deducting legal fees and expenses, approximately $59.8 million of the $91.3 million will be available for distribution, assuming court approvals. The GWG Wind Down Trust estimates that the cumulative distribution from the four settlements will be between $2.694% and 3.446% of the approximate $1.67 billion in pre-petition GWG L Bond holdings that are now Series A1 WDT Interests.

In Plain English:

• At the time of GWG’s bankruptcy filing in April 2022, GWG owed approximately $1.67 billion to L Bondholders.
• The four announced settlements, which still require court approval, will generate approximately $59.8 million for the GWG Wind Down Trust.
• Of that amount, GWG L Bond investors will likely receive between 2.7% and 3.45% of their original investment.
• In other words, investors can expect to receive approximately $26.94 to $34.46 for every $1,000 invested.

Can GWG L Bond investors recover additional investment losses?

Yes. In addition to the bankruptcy liquidation, GWG L Bond investors may be able to recover further losses by filing claims against the brokerage firms that sold these high-risk, speculative, and illiquid securities. These firms, which earned high commissions from the sales, had legal duties to their customers.

Iorio Law PLLC has already recovered approximately $3.5 million for GWG L Bond investors. We believe that pursuing recovery from the financial firms that marketed and sold these risky products remains the strongest avenue for investors to recoup their losses.

Take Action: Contact Iorio Law PLLC for a Free Consultation

If you invested in GWG L Bonds, we encourage you to contact Iorio Law PLLC today for a free, no-obligation consultation to discuss your legal rights and recovery options.

📞 Call: (646) 330-4624
📧 Email: info@iorio.law
📍 Location: One World Trade Center, 85th Floor, New York, NY 10007
🖊️ Free Case Review: Contact Form

For more information on our GWG L Bonds investigation, please visit gwglawyer.com.

About Iorio Law PLLC

Based in New York, NY, Iorio Law PLLC is a leading securities arbitration law firm dedicated to representing investors nationwide. With 15 years of experience and a proven track record in handling 700 cases, we are committed to fighting for GWG L Bond investors on a contingency fee basis—you only pay if we recover money for you.

As securities arbitration attorneys, Iorio Law PLLC’s managing attorney, August M. Iorio, has been actively investigating GWG L Bonds since 2021. Our firm is committed to helping investors understand their options and pursue the recovery of their investment losses. For more information, please visit our GWG L Bond Investor Recovery Center.

GWG Wind Down Trust’s Asset Liquidation: Key Takeaways

Following GWG Holdings, Inc.’s Chapter 11 bankruptcy, the GWG Wind Down Trust was established to manage and liquidate the remaining assets. Here’s a breakdown of the Trust’s liquidation efforts:

• Life Insurance Policy Portfolio: Sold in 2023 for $10 million in cash.
• Foxo Technologies Inc. Stock: Liquidated for $586,942.
• Beneficient Stock (NASDAQ: BENF): The Trust sold 46,966 shares in 2023 and 1,866,694 shares in 2024, generating about $6.2 million. As of December 31, 2024, it held 248,026 BENF shares, valued at $184,780. By April 1, 2025, the value of these remaining shares had declined to around $73,912.

The Trust also settled an $8 million claim with Fifth Season Investments, LLC, fully paying this amount.

Current Financial Standing of the GWG Wind Down Trust

The GWG Wind Down Trust’s 2024 financial statements reveal that, with nearly all tangible assets sold, the Trust now holds approximately $3 million in net assets.

The Role of the GWG Litigation Trust in Investor Recovery

The only other asset owned by the Wind Down Trust is a beneficial interest in the GWG Litigation Trust. According to the status report, as of December 31, 2024, the GWG Wind Down Trust could not estimate the value of its interest in the Litigation Trust, net of attorney’s fees and collection costs.

However, a significant update emerged post-2024:

• The Litigation Trust has reached settlements totaling $91.3 million, pending court approval.
• Before fees, this amount represents about 5.6% of the $1.6 billion in GWG L Bonds that were outstanding when GWG filed for bankruptcy in April 2022.
• The GWG Wind Down Trust estimates that four settlements will distribute 2.694% to 3.446% of the $1.67 billion in GWG L Bond holdings, equating to $26.94-$34.46 per $1,000 invested. The settlements await court approval, with a hearing set for June 3, 2025, at 9:00 a.m. CT.

For more details on this settlement, read our blog post: GWG Holdings L Bond Settlement: $50.5 Million Agreement Reached with Defendants Including Beneficient and Brad Heppner – What It Means for Investors.

What This Means for GWG L Bond Investors: Key Questions Answered

When Will Investors See a Distribution?

The GWG Wind Down Trust has not established a timeline for distributions to investors. Any payments are contingent on the Trust generating sufficient cash through asset sales or litigation proceeds. With only $3 million on hand, the Trust lacks the means to make a distribution.

As discussed above and outlined in our previous blog post, the GWG Litigation Trustee has agreed to settle various claims for approximately $91.3 million, pending court approval. The GWG Litigation Trustee has recently estimated that approximately $59.8 million will be distributed to the GWG Wind Down Trust after legal fees and expenses are paid. The $59.8 million in net settlement proceeds represent only about 3.69% of the $1.6 billion in outstanding GWG L Bonds at the time of GWG’s bankruptcy filing. Although the GWG L Bond Trustee has stated that it is too soon to determine how much each GWG L Bond investor will receive, if the GWG Litigation Trustee’s estimate is accurate and the entirety of the net proceeds were distributed to GWG L Bond investors, each investor would receive approximately $36.90 for every $1,000 they invested. The actual amount that GWG L Bondholders receive will depend on several factors, including court approval, fulfillment of conditions for certain settlements, the deduction of attorneys’ fees and expenses, and the resolution of several potentially large claims against GWG that are not yet resolved.

GWG L Bond Recovery: Understanding the Reality

It’s important for investors to understand the likely recovery scenario. Some brokers and advisors have led investors to believe they will recover most or all of their invested capital.

However, the GWG Litigation Trustee has cautioned against such assurances. In a January 2024 letter, the Trustee stated (emphasis added):

Over the past few months, numerous investors have reached out to me inquiring when they will receive their money back because their brokers have assured them they will receive all their money back. To be completely candid, I simply don’t understand how anyone can make any such assurances at this point in time.

To that end, I strongly encourage all GWG investors to consult their own independent counsel to discuss any potential claims they may have against any third parties who may have recommended this investment to them.

Your Best Option for GWG L Bond Recovery: FINRA Arbitration

August M. Iorio, managing attorney of Iorio Law PLLC, has successfully recovered over $3.5 million for GWG L Bond investors through FINRA arbitration claims against brokerage firms. These claims are separate from the GWG Wind Down Trust’s efforts and focus on the liability of the brokerage firms that sold these speculative, high-risk, and illiquid products to retail investors. Given the Trust’s limited assets, we believe that pursuing FINRA arbitration presents the strongest opportunity for investors to recover their GWG L Bond losses.

Benefits of Pursuing FINRA Arbitration

• Proven results: We have a track record of recovering millions for our clients.
• Broker accountability: FINRA arbitration allows investors to hold brokerage firms accountable for misrepresentations and unsuitable investment recommendations.
• Contingency fees: We work on a contingency fee basis, meaning you don’t pay legal fees unless we recover money for you.

Take Action: Contact Iorio Law PLLC for a Free Consultation

If you invested in GWG L Bonds, we encourage you to contact Iorio Law PLLC today for a free, no-obligation consultation to discuss your legal rights and recovery options.

📞 Call: (646) 330-4624
📧 Email: info@iorio.law
📍 Location: One World Trade Center, 85th Floor, New York, NY 10007
🖊️ Free Case Review: Contact Form

For more information on our GWG L Bonds investigation, please visit gwglawyer.com.

About Iorio Law PLLC

Iorio Law PLLC, based in New York, NY, is a leading securities arbitration law firm dedicated to representing investors nationwide. With 15 years of experience and a strong track record of handling 700+ cases, we are committed to fighting for GWG L Bond investors on a contingency fee basis. You only pay if we recover for you.

**Updated: April 8, 2025** According to court filings, the GWG Litigation Trustee estimates that approximately $59.8 million of the $91.3 million in proposed settlements would be distributed to the GWG Wind Down Trust. The settlements require court approval. The $59.8 million in estimated net settlement proceeds represents about 3.69% of the $1.6 billion of GWG L Bonds that were outstanding when GWG filed for bankruptcy in April 2022.

**Update: March 14, 2025** Over the past week, the GWG Litigation Trustee has reached agreements with additional defendants to resolve various matters, all of which are subject to court approval. In addition to the previously reported conditional agreement to settle claims with Beneficient and Brad Heppner for $50.5 million and the settlement with Whitley Penn for $8.5 million (both detailed in our original post below), the Trustee has also secured settlements with Jon R. Sabes, Steven F. Sabes, and their affiliated trusts and entities for $2.3 million, as well as with the law firm Mayer Brown LLP for $30 million. Collectively, the settlements total approximately $91.3 million, or about 5.6% of the $1.6 billion of GWG L Bonds that were outstanding when GWG filed for bankruptcy in April 2022. The following is a summary of the settlements to date:

For more information about recovering your GWG L Bond investment losses, please visit our GWG L Bond Investor Recovery Center.

Original Post:

GWG Holdings L Bond Settlement: $50.5 Million Agreement Reached with Defendants, Including Beneficient and Brad Heppner – What It Means for Investors

In a significant development for GWG Holdings, Inc. L Bond investors, a $50.5 million settlement agreement was announced on March 7, 2025, aimed at resolving long-standing litigation tied to the company’s bankruptcy. August M. Iorio, the managing attorney at Iorio Law PLLC, has been at the forefront of advocating for GWG L Bond investors, having already recovered over $3.5 million for our clients. This proposed settlement with certain defendants, including Beneficient and Brad Heppner, could impact thousands of investors who suffered losses when GWG filed for Chapter 11 bankruptcy in April 2022. Here’s what you need to know about the settlement, its implications, and how our firm can help you navigate this complex process.

Key Takeaways from the GWG L Bond Settlement

• Settlement Amount: $50.5 million to be paid by Defendants’ insurers, pending court approval.
• Litigation Resolved: Covers both a class action securities lawsuit and a bankruptcy adversary proceeding. The settlement resolves claims for investors who purchased GWG L Bonds between June 3, 2020, and April 16, 2021.
• Distribution: Funds will be allocated to holders of Allowed Claims in GWG’s bankruptcy case, with an estimated $31.48 per $1,000 Unit of L Bonds before deductions. That’s a little over three cents for every dollar invested.
• Opt-Out Contingency: The settlement could be terminated if too many investors opt out, with specific deadlines in place.
• Bar Order Hearing: A hearing to finalize a bar order protecting settling Defendants is scheduled for April 16, 2025.
• Next Steps for Investors: The best avenue of recovery for most GWG L Bond investors remains filing securities arbitration claims against the brokerage firm that sold these risky and speculative securities. Contact our law firm today for a free and no-obligation consultation.
• Settlement with Whitley Penn: Separately, the GWG Litigation Trustee is seeking approval to settle claims with the accounting firm Whitley Penn for $8.5 million.

Understanding the GWG Holdings Settlement

Background: GWG’s Financial Collapse

GWG Holdings, Inc., a Dallas-based financial services company, marketed L Bonds as a high-yield investment tied to life insurance policies. However, the company faced mounting debt—over $1.3 billion in L Bonds—and regulatory scrutiny, culminating in its Chapter 11 bankruptcy filing on April 20, 2022. This left thousands of investors, many of whom were retirees or conservative savers, with significant losses.

Since then, litigation has unfolded to recover funds for affected investors. The recent settlement marks a pivotal step in this process, addressing claims from both a securities class action (Case No. 3:22-cv-00410-B) and a bankruptcy adversary proceeding (Adv. Pro. No. 24-03090).

Settlement Details

Announced on March 7, 2025, the $50.5 million settlement involves Lead Plaintiff Frank Moore, GWG Litigation Trustee Michael Goldberg, and Defendants, including Brad Heppner and Beneficient entities. Key points include:

• Funding: The settlement is financed entirely by the Defendants’ insurers, with proceeds forming a Settlement Fund plus interest.
• Scope: It resolves claims for investors who purchased GWG L Bonds between June 3, 2020, and April 16, 2021, alleging securities law violations due to misleading statements in GWG’s Registration Statement.
• Distribution Process: After deductions for taxes, administration costs, and attorneys’ fees (up to $8.48 million for Class Counsel and 35% for Trust Counsel), the net fund will be distributed through GWG’s bankruptcy plan. Investors with Allowed Claims can expect an average of $31.48 per $1,000 Unit of L Bonds, though this is before deductions.

The settlement requires approval from both the U.S. District Court for the Northern District of Texas and the U.S. Bankruptcy Court for the Southern District of Texas. Notices will be sent to eligible investors with options to participate, object, or opt out.

Opt-Out Contingency: A Critical Clause

A supplemental agreement, also dated March 6, 2025, introduces an opt-out threshold. If too many class members exclude themselves, the Defendants can terminate the settlement. This contingency underscores the importance of understanding your rights:

• Deadlines: Opt-out requests must be tracked, with Defendants notified 14 days before the Settlement Hearing and a termination decision due 3 days prior.
• Flexibility: Investors can retract opt-outs, potentially preserving the settlement if the threshold is met post-withdrawal.

This clause adds uncertainty, making legal guidance essential for investors deciding their next steps.

Bar Order Motion: Ensuring Finality

On March 7, 2025, a motion was filed to secure a bar order, preventing third parties from pursuing GWG-related claims against settling Defendants. This protects the Defendants in exchange for committing nearly all D&O insurance proceeds to the settlement. A hearing is scheduled for April 16, 2025, at 2:30 p.m. in Houston, Texas, with notice provided via the GWG Trust website and other channels.

What This Means for GWG L Bond Investors

Limited Recovery Potential

While $50.5 million is a substantial sum, it pales in comparison to GWG’s $1.3 billion L Bond debt. The estimated $31.48 per $1,000 Unit recovery—before fees and costs—suggests a modest return for investors. For those with significant holdings, this may not fully offset losses, highlighting the need for personalized legal strategies.

Next Steps for Investors

• Review Your Eligibility: Confirm if you hold an Allowed Claim under GWG’s bankruptcy plan.
• Evaluate Options: Decide whether to participate, opt out, or object to the settlement, keeping opt-out deadlines in mind.
• Seek Legal Advice: The complexity of this settlement, coupled with the opt-out contingency and bar order, requires expert guidance to maximize recovery.

How Iorio Law PLLC Can Help

August M. Iorio, the managing attorney at Iorio Law PLLC, has recovered over $3.5 million for GWG L Bond investors through diligent advocacy and strategic litigation against broker-dealers and registered investment advisory firms that sold the GWG L Bonds to retail investors.

With the recovery to investors through the GWG Litigation Trustee’s efforts are likely to be nominal (in this case, a little over three cents for each dollar invested into GWG L Bonds), we continue to believe that GWG L Bonds investors’ best avenue for potential recovery of losses is to file a separate FINRA arbitration claim against their brokerage firms.

Our experience positions us uniquely to assist you in this settlement process:

• Case Evaluation: We’ll assess your potential claims, explain your options, and guide you through the arbitration process.
• Maximizing Recovery: Beyond this settlement, we explore additional avenues to recover losses, including claims against brokers or advisors who recommended GWG L Bonds.
• Proven Results: Our track record speaks for itself—our clients trust us to fight for their financial recovery. We know as much about what happened with GWG Holdings, Inc. and how brokerage firms sold the risky and speculative GWG L Bonds as anyone.

Stay Informed: Key Dates and Resources

• March 6, 2025: Settlement and opt-out contingency agreements signed.
• April 16, 2025: Bar order hearing in Houston, Texas.
• GWG Trust Website: Visit gwgholdingstrust.com/litigation-trust/ for updates.
• Court Filings: Access documents via the Northern District of Texas (Case No. 3:22-cv-00410-B) and Southern District of Texas Bankruptcy Court (Case No. 22-90032).

Contact Iorio Law PLLC Today

Iorio Law PLLC is a securities arbitration law firm in New York, NY. We represent investors nationwide and vigorously pursue FINRA arbitration claims on behalf of investors to recover investment losses.

August M. Iorio, managing attorney of Iorio Law PLLC, was at the forefront of the investigation into the GWG L Bonds starting in late 2021 and has already helped investors recover over $3.5 million in losses.

Don’t leave your recovery to chance—contact Iorio Law PLLC for a free consultation. Call us toll-free at (646) 330-4624 or click the link below to discuss how we can help you secure the compensation you deserve.

📞 Call: (646) 330-4624
📧 Email: info@iorio.law
📍 Location: One World Trade Center, 85th Floor, New York, NY 10007
🖊️ Free Case Review: Contact Form

For more information on our GWG L Bonds investigation, please visit gwglawyer.com.