Brad Heppner had the grand idea of bringing investment opportunities enjoyed by Wall Street institutions to small-fry investors. It brought misery instead, the Wall Street Journal reported. The Texas-based financial entrepreneur named his company Beneficient, a branding mashup of beneficial and beneficent, the quality of doing good. To bankroll his new venture, Heppner and his business partners merged it with GWG Holdings, an established financial-services firm that sold bonds to retail investors. GWG would raise the money. Beneficient would put it to work. Heppner served as board chairman of both companies and recruited a cast of notable directors, including two former Federal Reserve Bank presidents and legendary Dallas Cowboys quarterback Roger Staubach. From all appearances, Heppner and his team had a promising strategy: Beneficient would use money from GWG’s investor base to acquire stakes in private-equity funds and other highflying assets, giving rank-and-file investors access to markets typically off limits to them. The first funds from GWG to Beneficient, $50 million, landed in June 2019. As far as board directors were concerned, Beneficient would use the money to expand the business, former directors said. Instead, it kicked off what became one of the biggest financial blowups to strike retail investors in years. Within weeks, Tiffany Kice, Beneficient’s chief financial officer, discovered that millions of dollars went to payments for Heppner’s nearly 1,500-acre east Texas ranch and his personal travel via private jet. Kice, formerly an audit partner at KPMG and CFO of Chuck E. Cheese, also found that the company had been using a faulty accounting method that would misstate revenue.
