SAN DIEGO--(BUSINESS WIRE)--The Class: Robbins LLP informs investors that a shareholder filed a class action on behalf of all persons and entities that purchased or otherwise acquired GWG Holdings, Inc. L Bonds or Preferred Stock between December 23, 2017 and April 20, 2022, for violations of the Securities Exchange Act of 1934.
What Now: Similarly situated shareholders may be eligible to participate in the class action against FOXO Technologies (NYSEAM: FOXO). Shareholders who want to act as lead plaintiff for the class must should contact Robbins LLP. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery. For more information, click here.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.
What is this Case About: FOXO Technologies Inc. (FOXO) is Potentially Liable for GWG Holdings, Inc. (GWGHQ) Failure to Inform Investors It Was a Ponzi Scheme
According to the complaint, GWG was primarily in the business of purchasing life insurance policies from insured individuals, with the goal of collecting policy benefits upon the death of the insureds. GWG raised funds to purchase these life insurance policies primarily by selling GWG stock and bonds to investors. Plaintiffs allege that defendants used GWG to carry out a Ponzi scheme at the expense of GWG's investors.
Defendants’ scheme began to unravel in 2021 when, under mounting pressure from various accounting problems, auditor resignations, and an SEC investigation (which remains ongoing and has already resulted in charges against certain brokers), defendants were forced to pause GWG’s sales of securities, leaving it unable to fund its expenses and make required payments to its existing investors. On April 20, 2022, GWG filed for bankruptcy. GWG investors have not received the payments to which they are entitled since at least February 2022.
In the meantime, defendants used the proceeds from GWG to fund their individual ventures. One such venture was FOXO Technologies, which was created by the brothers who formed GWG and which received $28 million in funding from GWG. GWG still owns 16.9% of FOXO Technologies' outstanding stock.
Throughout the class period, defendants failed to disclose to investors that (i) they intended to, and did, misappropriate GWG assets, (ii) GWG’s life insurance investment business had failed, and (iii) GWG could only repay prior investors by issuing increasing amounts of securities to new investors. Shareholders were harmed as a result of defendants’ scheme and omissions, GWG’s resulting inability to make required payments to its investors, and the resulting precipitous decline in the market value of GWG’s securities.
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