Texas Supreme Court Decides On Death Bets

GILMER, TX / ACCESSWIRE / May 12, 2015 / The Texas Supreme Court issued the long anticipated decision in the case of Life Partners vs. Arnold. It answered, once and for all, the question as to whether or not a life settlement product or “death bet” that was sold to investors constituted a security under the Texas Securities Act.

On Friday May 8, 2015, the court’s opinion held that life settlement products which had been sold to investors constitute securities under the Texas Securities Act. Additionally, the Texas Supreme Court denied Life Partners’ request to prohibit retroactive application of its decision. The decision resolved a split within the Texas Court of Appeals.

“The Texas Supreme Court concretely rejected Life Partners’ claim that life settlements cannot be classified as securities under Texas law because pre-investment activities undertaken by a promoter do not trigger application of the investment contract label.”

Legal expert Christopher Bebel, Esq. of Tefteller Law, PLLC explained the implications of the decision by noting that the financial repercussions could be immense. Relying on an old opinion issued by the Texas Court of Appeals in Waco, Life Partners chose to implement a business model that essentially ignored the Texas Securities Act. Armed with this new decision, investors will be in a position to capitalize on state securities law principles.

In December of 2014, a federal district judge ordered Life Partners Holdings and two executives to pay $46.9 million in fines for misleading investors and providing inaccurate information about their products. To add to this, Robert Khuzami who then served as Director of the SEC’s Division of Enforcement stated,

“Life Partners duped its customers and shareholders by employing an unqualified medical doctor to assign baseless life expectancy estimates to the underlying insurance policies.”

According to a Securities and Exchange Commission task force, this is not an isolated case and suggests that these types of transactions be made subject to federal securities laws stating,

“The SEC has brought a number of successful actions alleging fraud in connection with life-insurance settlement securities.”

Mr. Bebel, a former SEC attorney, a former Regional Counsel for the Division of Enforcement of the National Association of Securities Dealers, who specialized in securities fraud cases while serving as an Assistant U.S. Attorney, U.S. Department of Justice, pointed out that Life Partners’ recent bankruptcy filing will prohibit cases from moving forward in the courts if Life Partners is named as a defendant. But, cases will proceed if the allegations are directed solely against those who were involved in the creation or sale of the investment products.

For questions or concerns regarding this press release or for more information on Life Settlement frauds, please use the following contact information to get in touch:

 CONTACT DETAILS:

Christopher Bebel, Esq.
Contact Name: Chris Bebel
Phone Number: (903)843-5678
E-mail Address: ChrisB@teftellerlaw.com
Mailing Address: 403 West Tyler St., Gilmer, TX 75644

SOURCE: Tefteller Law, PLLC 

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