CASES
Life Partners Holdings, Inc.
Class Period: May 29, 2007 to Jan 27, 2011
Lead Plaintiff Deadline: Apr 4, 2011 + Deadline passed
Summary of Case:
A securities class action has been filed against Life Partners Holdings, Inc. (LPHI) ("Life Partners" or the "Company") on behalf of all securities purchasers from May 29, 2007 through January 19, 2011, inclusive ("Class Period") in the United States District Court for the Western District of Texas.
The complaint alleges that Life Partners failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that the Company had 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) that the Company had 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, such that the Company's investors were unable to assess the accuracy or reliability of such data; (3) that by underestimating the life expectancy data to investors, the Company was able to charge substantially larger fees when brokering life settlement policies; (4) that the Company's revenues had been significantly increased through the employment of such business practices; (5) that, as a result, the Company'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 the Company's business practices; (7) that the Company lacked adequate internal and financial controls; and (8) that, as a result of the foregoing, the Company's statements about its financial well-being and future business prospects were lacking in any reasonable basis when made.
On December 21, 2010, The Wall Street Journal published an article questioning the Company's life-expectancy estimates and business practices. The article followed a comprehensive investigation into how the Company sold life settlement policies to investors. In particular, the 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." Then on January 20, 2011, The Wall Street Journal reported, and the Company subsequently confirmed, that the SEC was investigating Life Partners. The article reported that "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 this news, 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 purchased this company's shares during the Class Period and suffered a loss or for further information about the case, please review the links below.