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Life Partners Holdings May Face SEC Civil Action

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Life Partners Holdings Inc., has been investigated by the federal government regarding how it forecasts life expectancy of the insured. Last week, the company disclosed that had  been issued a “Wells Notice” by the Securities and Exchange Commission  (SEC) informing it that SEC staff has recommended civil action be brought against the company, as well as CEO Brian D. Pardo and President R. Scott Peden, for securities law violations.

Life Partners which buys discounted life insurance policies and sells shares to investors, charges investors more for policies on people with shorter life expectancies. If the insured lives longer than Life Partners predicts, investors continue to pay premiums which reduces their return.

Life Partners said the proposed civil action “relates to our knowledge of and disclosures about the accuracy of the estimates of the life expectancies of settlors,” and that they will respond “by setting forth our positions and explaining why we believe an enforcement action is not warranted.”

The Wells Notice allows Life Partners a chance to argue before the SEC moves forward with the civil action.

The news of the civil action proposal sent Life Partners shares plummeting by nearly 20 percent.

breakinglawsuitnews.com disclaimer: This article: Life Partners Holdings May Face SEC Civil Action was posted on Monday, May 16th, 2011 at 8:53 pm at breakinglawsuitnews.com and is filed under Fraud Lawsuits.

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