Life Insurance Bond Seller GWG Goes Bankrupt Amid SEC Probe (1)

Life insurance bond seller GWG Holdings Inc. filed for bankruptcy after a regulatory probe prompted it to stop offering the securities, sapping the company of liquidity.

GWG filed for Chapter 11 bankruptcy in Texas, which allows the company to keep operating while it works out a plan to repay creditors. It listed assets between $1 billion and $10 billion and liabilities in the same range in its petition.

The company, based in Dallas, buys life insurance policies from elderly people and has historically sold notes backed by those policies to meet its own financial obligations. But the company earlier this ...