A federal judge ordered Life Partners Holdings Inc and two top executives to pay $46.9 million for misleading investors about the core aspects of its business.
The U.S. Securities and Exchange Commission had sued Life Partners in 2012 and sought to prove that Life Partners intentionally misled investors over nearly four years about core aspects of its "life-settlements" business and that its two top executives engaged in insider trading.
U.S. District Court Judge James Nowlin on Tuesday ordered Life Partners to pay $15 million in illegal profit and $23.7 million in civil penalties. Chief Executive Brian Pardo was ordered to pay a $6.2 million in civil penalty, while general counsel and secretary of LPHI, R. Scott Peden, was given a $2 million civil penalty.
The case in the U.S. District Court for the Western District of Texas garnered national attention because of the company's unusual business of providing "life settlements" in which the holder of a life insurance policy sells the policy to an investor in exchange for a lump sum.
Judge Nowlin reversed a jury finding in March that Life Partners and its executives were liable on one count of fraud.
"In ordering this significant monetary relief, the court recognized the egregious nature of their misconduct, noting that the defendants engaged in 'serious violations' of the securities laws, that they 'deprived the investing public of the information it needed to make a fully informed decision about whether to invest in Life Partners," said Andrew Ceresney, SEC's enforcement director.
Life Partners could not immediately be reached for comment outside regular U.S. business hours.
Copyright Thomson Reuters. All rights reserved.
Get the Most Popular Lawyerherald Stories in a Weekly Newsletter
Join the Discussion
Related Articles
