Life Partners LPHI Lawsuit
Life Partners is subject to a lawsuit accusing it of violations of the Securities Exchange Act of 1934. Life Partners is a specialty financial services company in the secondary market for life insurance known generally as "life settlements."The lawsuit alleges that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them:
(1) LPHI routinely used unrealistic life expectancy data that produced inaccurately short life expectancy reports, which were subsequently used to sell life settlement policies to investors;
(2) LPHI purposely concealed the historical rate in which individuals insured by life settlement policies sold by Life Partners had lived past the life expectancy rates previously provided to investors, so that the Company's investors were unable to assess the accuracy or reliability of such data;
(3) LPHI by underestimating the life expectancy data to investors, the Company was able to charge substantially larger fees when brokering life settlement policies;
(4) LPHI's revenues had been significantly increased through the employment of such business practices;
(5) that, as a result, LPHI's financial statements were false and misleading at all relevant times;
(6) that such business practices, when they were discovered, would initiate an investigation by the federal authorities into LPHI's business practices;
(7) LPHI lacked adequate internal and financial controls; and
(8) that, as a result of the foregoing, the LPHI's statements about its financial well-being and future business prospects were lacking in any reasonable basis when made.
The Wall Street Journal published an article in December 2010 questioning the LPHI's life-expectancy estimates and business practices. The article was based on a comprehensive investigation into how the Company sold life settlement policies to investors. The WSJ article stated that Life Partners "has made large fees from its life-insurance transactions while often significantly underestimating the life expectancies of people whose policies its customers invest in." In a follow up article in January 2011, The Wall Street Journal reported, the SEC was investigating Life Partners: "As part of its probe, the SEC's enforcement division has been seeking experts to analyze the way Life Partners has estimated the life expectancies of the insured individuals."
On news of the SEC investigation, shares of the Company's stock declined $2.58 per share, or over 17 percent, to close on January 20, 2011 at $12.46 per share, on unusually heavy trading volume. The Company's stock continued to decline as additional news about Life Partners was subsequently reported.
If you are a current shareholder and purchased during the period May 29, 2007 and January 19, 2011, and would like to discuss your options of exercising your rights as a shareholder, please contact our law firm.
For complete info visit our Life Partners LPHI Lawsuit Web Site.
Submit your Info Below
All contents copyright lawyerviews.com 2010
Lawyerviews.com Voted the #1 Web Site development company in the Lawyers Weekly Readers Choice poll.