Life Partners (LPHI) Shares Slammed as SEC to Bring Civil Injunctive Action
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Life Partners Holdings (Nasdaq: LPHI) shares have been slammed following a filing with the SEC, stating: "On May 9, 2011, we received a “Wells notice” from the staff of the SEC stating that the staff will recommend that the SEC bring a civil injunctive action against us and two of our directors and executive officers, Brian D. Pardo and R. Scott Peden, for possible violations of Section 17(a) of the Securities Act of 1933, Sections 10(b) and 13(a) of the Securities Exchange Act of 1934, and certain rules thereunder. We understand at present that the primary basis for the proposed civil action relates to our knowledge of and disclosures about the accuracy of the estimates of the life expectancies of settlors.
The Wells notice is neither a formal allegation nor a finding of wrongdoing. Upon receipt of a Wells notice, the recipient is afforded an opportunity to present its positions with respect to the staff’s recommendation before the SEC decides whether an enforcement action will be authorized. We intend to respond by setting forth our positions and explaining why we believe an enforcement action is not warranted. We cannot predict whether the SEC will accept our positions or follow the recommendations of the Staff and initiate an enforcement action."
Shares are down nearly 9 percent this afternoon.
The Wells notice is neither a formal allegation nor a finding of wrongdoing. Upon receipt of a Wells notice, the recipient is afforded an opportunity to present its positions with respect to the staff’s recommendation before the SEC decides whether an enforcement action will be authorized. We intend to respond by setting forth our positions and explaining why we believe an enforcement action is not warranted. We cannot predict whether the SEC will accept our positions or follow the recommendations of the Staff and initiate an enforcement action."
Shares are down nearly 9 percent this afternoon.
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