Texas State Securities Board bars life settlements broker over undisclosed comissions

by Jim Orr

A Texas investments adviser has been barred by state regulators from working as a representative or broker as a result of fraudulent practices in connection with life settlement investments. James Poe, the president of Jim Poe & Associates Inc. in Fort Worth, allegedly received undisclosed payments from another firm he owned in connection with the sale of life settlements.

According to the Texas State Securities Board, Poe advised certain individuals to invest in life settlements between 2011 and 2015. These life settlements investments were sold by SRP-LS200, which was also owned by Poe. Investors were allegedly promised a 75% return on their investment.

The Texas State Securities Board alleged that although investments received by the company were used to purchase life insurance policies and settle other costs, Poe received an undisclosed 10% commission in connection with the transactions. The securities board also alleged that undisclosed 20% payments were made from these investor funds to International Alternatives PR, a company that was also controlled by Poe.

The Texas State Securities Board said that Poe’s actions were “intentional failures to disclose material facts to the investors and constitute fraudulent business practices.” An official with the securities board said that the fact that 30% of investors’ money was diverted to companies controlled by Poe amounted to a material risk to their investments that he was required to disclose. Poe’s failure to disclose these facts represented a “significant breach of the trust those clients afforded him,” the official said.

The securities board also said that Poe was not registered as a securities broker between 2011 and 2015. As a result, his receipt of commissions from the sale of life settlement investments represented a violation of Texas state securities law.

Risks for Life Settlements Investors

Life settlement investments are life insurance policies that are purchased from the insured individual before the maturity date of the policy. When the insured individual dies, the purchaser of the policy, rather than the insured individual, receives the death benefit from the policy. The value of life settlements are determined by the life expectancy of the insured individual: the shorter the life expectancy, the greater the value of the policy.

Although life settlement investments have become increasingly popular over recent years, these investments are not without risks. If the individual insured under the policy lives longer than expected, the investments can lose much of their value. Investors may lose a significant portion of their investment by having to pay the premiums to maintain the insurance policy.

Some insurance companies have also attempted to challenge the validity of life settlements investments by claiming that these policies are “stranger-originated life insurance,” or STOLI policies, which are barred in many states. Although many states have passed laws to protect the rights of life settlements investors, in some cases, insurers have still attempted to challenge valid life settlements transactions by making STOLI allegations.

Life Settlements Lawsuits Filed by Heygood, Orr & Pearson

If you or your company were the victim of wrongful actions in regard to a valid life settlement investment, you may be able to file a lawsuit and attempt to recover some or all of your losses. The first step in taking legal action is to speak with a law firm with the experience in life settlements litigation to advise you regarding your legal rights.

The law firm of Heygood, Orr & Pearson has represented individual investors and corporations in lawsuits involving life settlements. In some of these cases, insurance companies refused to pay the death benefits on valid life insurance policies by claiming that the transaction was a STOLI policy.

Heygood, Orr & Pearson has also handled cases involving investors who were misled by life settlements providers about the value of their investments. Our law firm has also handled cases involving investors who were charged excessive amounts for these policies based on erroneous life expectancy estimates. Heygood, Orr & Pearson has also filed lawsuits on behalf of life settlements brokers.

For a free legal consultation about filing a life settlements lawsuit, contact the lawyers at Heygood, Orr & Pearson by calling our toll-free hotline at 1-877-446-9001. You can also reach us by following the link to our free case evaluation form and answering a few brief questions about your case to get started.