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Securities and Exchange Commission Accuses 3 Top Executives from Life Partners Life Settlement Company of Fraud With Life Expect

Posted Jan 04 2012 6:58pm

This is just a bad business all the way around in my book as investors are hedging image on when the person who’s life insurance policy they have taken over. I love the fact that Rick Perry seems to be a friend and fan of the company and it goes to show how deep digital illiteracy with those running for office runs. I wonder how many people he might be invested in and waiting for them to die while he uses the CEO’s plan for his Presidential campaign?  Back in January of 2010 the SEC investigation was announced. 

Shareholders were duped on the fact that they thought the insured were going to die sooner than they did.  Again, this is a crappy business all the way around as you have some investor waiting for you to die so they can collect.  When the policies are no longer valid, they should go away and not continue on in schemes as such.  The company used a doctor with his “formulas” to give the estimated life span expected.  We now have others working on algorithms for that too and it still a sucking business in my opinion, math or no math. 

“In late 2005, a policy on the life of an 80-year-old California woman was available for purchase. Life Partners acquired the $1 million policy on behalf of its clients, paying $300,000, according to company filings in Texas.

It brokered the policy to the clients the same day for more than $492,000 plus five years of future premiums, an additional $58,000.”

In 2002, Life Partners put a life expectancy of two years or less on the insured person in a third of the 297 policies it sold, and four years or less on all but a handful. Most were listed as HIV-positive.

If the projections were accurate, almost all of those policies should have "matured," with the insured dead, by the end of 2009, but instead the insured had outlived the estimate in 283 of the 297 policies.”

The MIB, which has collected information on those insured for years has software they market for that purpose and what you body will cost.  Again this is pretty sick stuff. 

If you want to read more on this “dark” business, see the link below about the Human Hedge funds…again these types of policies should be outlawed as nobody should have to live their life with a “bounty” hanging on it.  You could also say we once again have more “Attacks from the Killer Algorithms” in play.  BD  

'Dead Peasant' Life Insurance Policies - Human Hedge Funds The Next Bond Issues

Jan. 04--Waco-based Life Partners Holdings and three of its top executives were accused Tuesday by the Securities and Exchange Commission of "systematically and materially" misleading investors about the life expectancy of people whose life insurance policies it traded.

The scheme inflated the value of the company's stock, according to a suit that the SEC'sFort Worth office filed in federal court in Waco.

Investigators say CEO Brian Pardo sold about $11.5 million of Life Partners stock at inflated prices while having information not available to the public about the company's dependency on short-lifespan estimates.

The federal action could become a political embarrassment to Gov. Rick Perry, who is running for the Republican presidential nomination. Perry's campaign used Pardo's Cessna Citation X business jet and, according to The New York Times, acknowledged underpaying Pardo nearly $23,000 for nine days early in Perry's White House quest.

"The senior-most executives at Life Partners concealed significant risks to the business, manipulated financial statements with improper accounting, and knowingly profited from their misconduct by executing insider trades based on information that was not available to the public," said David Woodcock, director of the SEC'sFort Worth office.

Among misleading statements to investors, Pardo said during teleconferences in 2007 and 2008 that Life Partners was delivering "double-digit" returns, the SEC said.

But he knew such returns were impossible even in the best-case scenarios, in which all of those insured die within the company's estimated life expectancy period, the SEC said. Actually, 2,900 insured people had outlived the company's predicted lifespan, it added.

The suit seeks unspecified civil penalties from the three as well as the return of stock trade profits and bonuses from Pardo and Martin.


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