Category Archives: Life Settlements

Richard M. Ohlhaber-Former Southwest Securities Broker-Discloses Pending Customer Disputes/Regulatory Actions

Grapevine, Texas

According to FINRA records,  Richard M. Ohlhaber   a stockbroker  who most recently was  employed by FSC Securities Corp., Inc. , discloses two pending customer disputes. He also discloses  3 prior final regulatory events , 7 prior final customer disputes and has been permanently barred from the securities industry .

The Financial Industry Regulatory Authority (FINRA) is the agency that licenses and regulates stockbrokers and brokerage firms. FINRA requires brokers and brokerage firms to report customer complaints and disputes as well as regulatory sanctions. In addition brokers are required to disclose certain financial matters such as personal bankruptcies, judgments and liens.

In currently pending FINRA Case 15-02113, a customer while Ohlhaber was employed by Southwest Securities (now known as Hilltop Securities) ,  alleges damages of $230,000 for losses incurred by following Ohlhaber’s recommendation to invest in Life Partners, Inc. , an unregistered security which was represented as a conservative, low risk investment.

In currently pending FINRA Case 13-03547, a customer while Ohlhaber was employed by Southwest Securities,  alleges damages of $450,000 for misrepresentation with respect to the tax consequences of the surrender of a variable annuity.

In 2014, FINRA permanently barred Ohlhaber from the securities industry in connection with his sale of life settlement contracts.

According to FINRA records Ohlhaber was registered with FSC Securities from 8/2012-11/2012. Prior to that he was registered with Southwest Securities from 5/2008-4/2012.

If you have questions about an account handled  by Richard Ohlhaber, call for a no charge consultation.

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.

Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

James Poe of Ft. Worth Sanctioned for Sale of Life Settlements

March 21, 2016- Austin, Texas

The Texas State Securities Board (TSSB) entered an order revoking the registration of Fort Worth investment adviser James Poe as well as his company, James Poe & Associates,  for engaging in fraudulent practices and selling securities without being properly licensed.

According to the TSSB, from 2011-2015, Poe sold life settlement contracts promising investors a 75% return. Life settlements are complex investments in which the investor receives an interest in the death benefits of a third party.

Poe and his related company International Alternatives collected huge commissions on the sales of the life settlements but did not disclose fully to investors the amount of commissions they were earning.

Poe was reprimanded, his registration as an investment adviser was revoked and he was ordered to cease and desist from engaging in fraudulent business practices.

Dave Lieber of The DallasNews.com Watchdog Column reports that notwithstanding the TSSB sanctions,  James Poe is still running his hour long show “Found Money Radio” on KRLD (1080am) and WBAP (820AM). Lieber spoke to TSSB spokesperson Bob Elder, who made the following comment about Poe:

“First, he is not registered, so he can’t act as an investment adviser representative or steer people to a registered firm and receive compensation for it.

“Regardless of whether James Poe chooses to notify his listeners on his radio commercial that he has had his registration revoked, anyone considering hiring any investment adviser, dealer or agent should check to see if the person is registered with the Texas State Securities Board.”

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.

Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Rex Securities Law Investigates Dallas Based Novers Financial

June 1, 2015-Dallas/Ft. Worth, Texas

Rex Securities Law is investigating Novers Financial, Christopher A Novinger and Brady J. Speers, of Mansfield, Texas, in connection with the sale of life settlements.

The Securities and Exchange Commission recently filed an action naming Novers Financial and its principals, Christopher Novinger and Brady Speers alleging that the investments were guaranteed and offered safety similar to CDs. Novinger and Speers operated a financial radio show touting the investments to the public.

“We allege that Novinger and Speers described speculative investments as safe and secure and were willing to manipulate investors’ financial information to make a sale,” said David Peavler, Associate Director of the SEC’s Fort Worth Regional Office.  “No matter what a salesperson tells you, interests in life settlements are never guaranteed, risk-free, or federally insured.”

In addition to the charges against Novers Financial and the two principals, the SEC charged ICAN Investment Group LLC and Speers Financial Group LLC for acting as unregistered broker-dealers.  The SEC seeks injunctive relief, return of allegedly ill-gotten gains with interest, and financial penalties.

If you have information related to this investigation, we would appreciate hearing from you.

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.

Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

Dallas Based Worth Financial Group Sanctioned by Securities Regulator

January 9, 2015

Worth Financial Group  entered into a Letter of Acceptance, Waiver and Consent  (AWC) with the Financial Industry Regulatory Authority (FINRA) to resolve allegations that  it failed to establish adequate supervisory systems and written supervisory procedures to supervise sales of life settlement investments by the firm’s registered representatives and non-associated individuals for whom the firm received override commissions.

FINRA alleged that from July 2008 to April 2011 Worth sold fractional interests in life settlements issued by Life Partners, Inc., and collected override commissions on those sales.

Worth Financial Group was censured and fined $10,000.

FINRA Case # 2011025625101

Worth Financial Group has been registered with FINRA since 1983 and is headquartered in Dallas, Texas.

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.

Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

Waco Based Life Partners Holdings, Inc.–Future Uncertain

December 22, 2014-Waco, Texas

Life Partners Holdings, Inc. , the Waco company that has been a pioneer in selling interests  in life insurance policies on the  lives of third parties to investors (also known as a “viatical settlement”) was recently ordered to pay $15 million in illegal profits and penalties of $23.7 million, by U.S. District Court Judge James Nowlin. In his ruling, Nowlin noted that the company has “at best a casual attitude” toward securities laws.

In a recent SEC action, Brian Pardo, CEO and founder was hit with a civil penalty of $6.2 million and general counsel and secretary of Life Partners Holdings, R. Scott Peden was ordered to pay a penalty of $2 million.

Business Model of Life Partners Viatical Settlements

The investment model is relatively simple. Using money raised from investors, Life Partners buys the rights to the proceeds of a life insurance policy from an individual who is generally elderly and/or ill, by paying something less than the death benefits of the policy, and the investor agrees to continue making the premium payments until the person dies. Upon death, the investor receives a portion of the insurance proceeds, less fees.

For example, consider the situation described in the Wall Street Journal in a 12/21/2010 article. In summer of 2005, Life Partners investors bought a $2 million policy on the life of Marvin Aslett, who was then 79. At the time the investors were told that he had 2 to 4 years to live. Had he died during as projected at the time the policy was purchased, investors would have realized a tidy return. Unfortunately for the investors,  (and of course fortunate for Aslett and his beloved family) at the time of the WSJ article, Aslett was  alive and well at age 84 , while the investors in the policy were  paying premiums .

Life Expectancies Routinely Underestimated

Obviously if the person on whose life the policy is written dies sooner than projected life expectancy, the investors realize a more favorable return since they pay less in annual premiums and reach payout quicker. This makes the accuracy of the prediction of the longevity of the insured (the actuarial prediction) extremely important.

According to the WSJ article, as well as the allegations in Stone, et al v Pardo, Life Partners, et al pending in the Western District of Texas, those life expectancies are provided to Life Partners by a single person, Dr. Donald T. Cassidy, of Reno Nevada, who is paid a monthly retainer of $15,000, plus $500 for every life policy he assesses.

The allegations are that Cassidy’s life expectancy calculations regularly conclude a life expectancy substantially shorter than the longevity projected by independent firms, a factor that works in favor of Life Partners since it results in a quicker payout, fewer premiums to pay and a greater return to the investor, making it much easier to sell. The Stone case alleges that Cassidy’s predictions are routinely inaccurate in favor of the company and cite a  study in which 283 of 297 policies the insured outlived Cassidy’s predictions, sometimes by as much as twice as long. Thirty-four percent lived triple the estimate of Cassidy per the Stone complaint.

Recourse for Investors

If you invested in Life Partners on the recommendation of your broker or broker dealer or a registered investment advisor you may be able to recover damages. Financial professionals have a duty to perform due diligence on the products they sell and to make recommendations that are suitable given the age, health and level of financial sophistication of the investor. Call to discuss your rights with an experienced securities attorney.

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.

Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870