Investor Awarded $87K and Attorneys’ Fees in GWG L Bonds Arbitration

In May 2025, a FINRA arbitration panel ordered Lifemark Securities Corp. to pay $87,868 in compensatory damages to investors who purchased GWG L Bonds. The panel also awarded 9% annual interest, $19,701.92 in costs, and $26,265.39 in attorneys’ fees under New York’s consumer protection law. The award represents another recovery for investors through FINRA arbitration after the collapse of GWG Holdings.

GWG Holdings’ L Bond Program

Over several years, GWG Holdings accumulated more than $1.6 billion by selling “L Bonds” to retail investors. The company described the bonds as secured by life insurance policies and paying annual interest of 5.5% to 8.5%, depending on term length. Bonds typically matured in two to seven years and renewed automatically unless investors opted out.

These L Bonds were in fact high-risk, illiquid securities. They could not be traded, and GWG could redeem them without penalty. A majority of bondholders saw their investments rolled into new terms, often without realizing the limited liquidity or heightened risk.

GWG Holdings’ decision to shift significant capital to Beneficient Company Group, L.P. drew scrutiny from regulators. Questions emerged regarding the accuracy of GWG’s accounting and the appropriateness of its bond sales tactics. In October 2020, the SEC issued subpoenas to investigate these concerns, eventually targeting the sales activities of some participating broker-dealers.

GWG’s downfall unfolded rapidly. Following its auditor’s resignation in 2021, the company missed a $3.25 million interest payment in January 2022 and sought Chapter 11 protection only months later. The bankruptcy left investors reeling. The Wind Down Trust has since projected returns of just 2–3% of principal, meaning most bondholders will recover only a small fraction of their initial investment.

What the Panel Found

The investors asserted claims including violations of federal securities laws, New York’s consumer protection statute (N.Y. Gen. Bus. Law § 349), the Securities Act of Connecticut, breach of contract, fraud, breach of fiduciary duty, and negligence. The panel found Lifemark Securities Corp. liable and ordered compensatory damages, interest, and costs.

The panel also awarded attorneys’ fees under N.Y. Gen. Bus. Law § 349(h), which permits prevailing investors to recover reasonable attorneys’ fees.

The Award to the Investor

The arbitration panel awarded the investors:

• $87,868 in compensatory damages
• 9% annual interest, beginning 45 days after the award until paid in full
• $19,701.92 in costs
• $26,265.39 in attorneys’ fees

The panel denied punitive damages and apportioned 50% of the total hearing session fees to Lifemark Securities Corp.

This award is significant because it included attorneys’ fees, something not commonly granted in FINRA arbitrations.

Why This Award Matters – Investor Update 2025

This case shows that panels are willing to award not only compensatory damages but also attorneys’ fees and costs where securities arbitration lawyers use applicable state consumer protection laws to maximize investor recovery. That makes it an especially notable result for investors pursuing GWG claims.

Even though GWG filed for bankruptcy, given the trustee’s projection that bondholders may recover only 2–3% of principal invested, investors can still pursue claims against the brokerage firms that sold the bonds. Arbitration panels have awarded compensatory damages, interest, attorneys’ fees, and costs in multiple cases, underscoring arbitration as a viable path to recovery. Read more about GWG L Bonds in our GWG L Bonds Claims page. GWG L Bonds are also one example of the risks associated with Alternative Investments, which are often complex and unsuitable for retail investors. 

This award highlights how arbitration continues to deliver meaningful recoveries for GWG L Bond investors. By comparison, the Wind Down Trust estimates that if the District Court approves the settlement with GWG’s former directors and officers, cumulative distributions to bondholders will be only 2.694% to 3.446% of invested principal. That means only $2,694 to $3,446 on a $100,000 investment – a fraction of the losses investors suffered.

Key Takeaway for Investors

Awards like this show brokerage firms can be held liable for unsuitable GWG L Bond sales, with investors recovering damages, interest, and attorneys’ fees through FINRA arbitration.

FINRA arbitration claims often involve:

• Suitability (FINRA Rule 2111): Brokers must have a reasonable basis to believe an investment fits a client’s financial situation, objectives, and risk tolerance. GWG L Bonds were illiquid, high-risk, and complex, and often failed this test. 
• Supervision (FINRA Rule 3110): Firms must supervise their brokers’ recommendations and sales. Arbitration panels have consistently held firms accountable for failures in overseeing complex products. 
• Commercial Honor (FINRA Rule 2010): FINRA requires members to adhere to high standards of commercial honor and just and equitable principles of trade.

Contact Altamirano PLLC About GWG L Bond Claims Today

If you invested in GWG L Bonds and have losses, call Altamirano PLLC today. Our Principal, Jorge Altamirano, has handled more than 1,500 FINRA arbitration claims and continues to represent GWG investors nationwide in recovering their losses. Many investors were told these bonds were “safe” or “low-risk,” but in reality they were high-risk, complex, illiquid, and unsuitable for investors, including retirees and conservative investors. 

Call us at (212) 220-6556 to discuss your options. We handle cases on a contingency fee basis, which means you do not owe us a legal fee unless we recover for you.

Contact Jorge Altamirano, Principal of Altamirano PLLC
One World Trade Center, 85th Floor
New York, NY 10007
(212) 220-6556
[email protected] 

Securities claims are time-sensitive. Harmed investors are encouraged to act quickly and contact Altamirano PLLC to speak with an experienced securities arbitration lawyer.