Secondary Insurance Market Blog

The life settlements industry “seems to attract both fraud and financial blowups” and should be avoided by investors. So says a financial advice columnist, Michael Taylor, who points to the fraud and “financial blowups” as the rationale to avoid the investment, rather than the “ick factor” of investing in death. In his July 7 column, he also says that he “decided long ago that when I write my first novel – a financial thriller obviously – the main plotline will involve a hedge…

Read More Read More

The Securities and Exchange Commission this month announced that it had reached a settlement with Verto Capital Management and one of its officers over charges that the company “used new investor money to repay earlier investors in Ponzi-like fashion and tapped investor funds for the CEO’s personal use”, according to a press release from the SEC. Said the SEC: “Verto Capital Management and William Schantz III raised approximately $12.5 million selling promissory notes to purportedly fund Verto Capital’s purchase and sale…

Read More Read More

The Appellate Division of the New York Supreme Court affirmed a determination that a licensed agent/broker for a viatical company, Mutual Benefits Company, was to be fined for engaging in misleading life settlement sales practices. In re Nichols, 523289, 2017 N.Y. App. Div. LEXIS 1869 (A.D. Mar. 16, 2017), is the opinion where the appellate court affirmed the hearing officer’s decision to fine agent/broker Richard Nichols.  The court focused a portion of its opinion on the basics of viatical transactions: [A] viatical settlement…

Read More Read More

“Life settlement companies are scrambling to meet complicated cybersecurity rules imposed by a New York regulator,” reports The Deal in an article entitled “Market Players Scramble to Meet New York Cybersecurity Rules”. The article describes the New York State Department of Financial Services’ cybersecurity rules that went into effect March 1 and are aimed a protecting private personal information of individuals from cyber threats, and how the rule gives companies holding such information – including banks and other financial service…

Read More Read More

A federal judge last week gave his approval to a reorganization plan for Life Partners Holdings Inc., a life settlement company that filed for bankruptcy last year following reports that the company has engaged in allegedly fraudulent practices – practices that were described by the Wall Street Journal earlier this year as “one of the largest frauds in Texas.” Under the reorganization plan, another life settlement company, Vida Capital, would take over and several thousand investors would have the option to cancel or keep their…

Read More Read More

A recent published report says that a viatical company has been sued for misrepresenting the life expectancy information. Said the report: A jazz musician who invested $20,000 in two viatical policies 18 years ago with Legacy Capital Corp. has sued, claiming a non-board certified physician dying of AIDS had backdated a life expectancy report. The story, appearing under the headline Musician Sues Legacy Capital Over $20K Viatical Investment, Alleging Fraud, explains that musician Christopher Amberger filed a lawsuit this month…

Read More Read More