White Collar Crime
SEC Sues Life Partners for Defrauding Shareholders
Posted Jan 5, 2012 4:21 PM CDT
By Rachel M. Zahorsky
The Securities and Exchange Commission has filed suit against Life Partners Holdings Inc. and three top executives for defrauding shareholders in life settlement deals.
Chairman and Chief Executive Officer Brian D. Pardo, President and General Counsel R. Scott Peden and Chief Financial Officer David M. Martin have been accused of knowingly underestimating life expectancies used in transactions from 2007 to 2011 to mislead investors about the firm’s profit potential, Bloomberg Businessweek reports.
“The senior-most executives at Life Partners concealed significant rsks 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,” David Woodcock, director of the SEC’s Fort Worth Regional Office, said in a statement yesterday.
Meanwhile, Pardo, who owns more than 50 percent of the firm’s shares, said the executives will “vigorously defend ourselves against these meritless claims,” according to Businessweek.