The SEC has filed suit against Life Partners Holding, Inc., Life Partners, Inc., R. Scott Peden (General Counsel and President), Brian Pardo (Chairman and CEO), and David Martin (CFO) in federal court in Waco, Texas, for allegedly misrepresenting the value of life insurance policies purchased on behalf of Life Partners’ customers. (See SEC v. Life Partners Holdings, Inc., Brian D. Pardo, R. Scott Peden and David M. Martin, Case No. 6:12-cv-00002 in the United States District Court for the Western District of Texas). The SEC alleges that Life Partners systematically and materially underestimated life expectancies in order to boost revenues and profit margins. Click here for the full SEC Litigation Release.

In addition, the Texas State Securities Board (TSSB) issued a Press Release outlining Life Partners’ alleged failure to answer several subpoenas of the TSSB. (See Texas State Securities Board v. Life partners Holding, Inc., Cause No. D-1-GN-11-002286, in the District Court of Travis County, Texas, 126th Judicial District). The TSSB has been conducting an ongoing investigation into Life Partners for suspected violations of the Texas Securities Act, including, but not limited to:

Fraudulent practices in connection with the offer for sale and sale of investments in life settlement contracts; the sale of unregistered investments; the sale of investments in life settlement contracts by people who are not registered dealers, agents, or investment advisers; and the fraudulent offer and sale of shares of its common stock.

Due to Life Partners’ alleged failure to cooperate, the TSSB was forced to file an Application to Enforce Subpoenas in the District Court of Travis County. In the Application, TSSB seeks a court order compelling Life Partners to disclose its records related to the marketing and sale of life settlement contracts. Named in the filing are Life Partners Holding, Inc., Life Partners, Inc., R. Scott Peden (General Counsel and President) and Brian Pardo (Chairman and CEO).

About Moulton & Arney, LLP

Moulton & Arney is a Houston, Texas, based boutique litigation and FINRA arbitration law firm representing investors nationwide in claims to recover investment losses. The investment fraud attorneys at Moulton & Arney, LLP have extensive experience representing individual investors in securities litigation and arbitration. Moulton & Arney have successfully represented thousands of individual investors in securities fraud lawsuits and arbitrations, with combined claims of hundreds of millions of dollars. Cindy Moulton has represented more than 1,000 investors in litigation arising from the sale of viatical investments.

Attorney Cynthia R. Levin Moulton, the firm’s founder, has a proven track record in investment fraud claims involving complex investment vehicles. She has been named a Texas Super Lawyer, is rated 5 out of 5 by Martindale.com, and is rated a 10.0 by AVVO.com.

To contact Moulton & Arney, LLP, visit securitiesfraudcounsel.com or, call (866) 378-4465, or (713) 353-6699.

A federal court consent order imposing more than $2 million in restitution and civil monetary penalties on defendants Jeremiah C. Yancy and his Houston company, Longbranch LLC was announced by the U.S. Commodity Futures Trading Commission (CFTC.) Yancy and Longbranch have been charged with operating a million dollar foreign currency (forex) Ponzi scheme and misappropriating customer funds, according to CFTC.

The Honorable Vanessa Gilmore of the U.S. District Court for the Southern District of Texas entered the consent order. It requires the defendants to pay $692,000 in restitution and each to pay a $692,000 civil monetary penalty. The defendants are also barred from participating in any commodity-related activity.

64 customers were found to have been solicited by Yancy and Longbranch, some of which were Yancy’s own church members. The defendants told these prospective customers that they managed forex trading for non-profit organizations, such as churches and orphanages. They also solicited customers through various “fund-raising entities” to trade forex through them and to invest in other financial schemes, according to the order. The order also found that the defendants made misrepresentations to prospective customers through telephone conference calls set up by the fund-raising entities.

Customers were reportedly guaranteed 20 to 40 percent in monthly returns by Yancy and Longbranch. Customers were sent statements showing high returns, but were not told that these statements were for test accounts and did not show actual information.

According to the court, 64 customers opened forex trading accounts funded with a net total of $630,000. The majority of the accounts had net losses of up to 95% and altogether the accounts lost $230,000. Yanch and Longbranch were also found to have integrated at least $330,000 of customer funds into their own funds and deposited those funds into forex trading accounts in their own names.

Full article: http://www.cftc.gov/PressRoom/PressReleases/pr6077-11.html

The Securities and Exchange Commission has charged Ephren W. Taylor II with running a Ponzi scheme which targeted church congregations.

According to the SEC, Taylor made multiple false statements with the intention of luring investors into two investment programs being offered through his company, City Capital Corporation. While the investors believed their money was going to charities and economically disadvantaged businesses, it was secretly being diverted to pay for the publishing and promotion of Taylor’s books, his wife’s singing career, the hiring of consultants to clean up his public image.

Additionally, City Capital and its chief operating officer, Wendy Conner, were also charged. Connor allegedly received hundreds of thousands of dollars from investors in salary and commissions, according to the SEC.

“Ephren Taylor professed to be in the business of socially-conscious investing. Instead, he was in the business of promoting Ephren Taylor,” said David Woodcock, Director of the SEC’s Fort Worth Regional Office. “He preyed upon investors’ faith and their desire to help others, convincing them that they could earn healthy returns while also helping their communities.”

Full Story from SEC

A South Florida investment manager has been charged by the SEC with defrauding investors by making false claims about his investment history, using false account statements as proof of his bogus profits.

According to the complaint, the SEC alleges that since 2005, George Elia and International Consultants & Investment Group Ltd. Corp., pulled in at least $11 million from investors by falsely claiming annual returns as high as 26%, and that Elia transferred more than $2.5 million of investor funds to two entities he controlled, Elia Realty, Inc., and 212 Entertainment Club, Inc.

Elia, a former resident of Oakland Park, Florida told investors that he was highly experienced in day trading stocks and ETFs, when in reality his trading resulted in losses or minimal gains. The quarterly account statements he sent to clients exaggerated their returns, according to the SEC.

The complaint also noted that Elia was known for meeting and pitching prospective investors over expensive meals in and around Fort Lauderdale. The SEC said his clients were generally gained by word-of-mouth referrals from common friends and relatives. The gay community of Wilton Manors made up a significant number of his fraud scheme victims.

“Elia’s blatant fraud and cruel deceptions have wrecked the lives of investors and their families,” said Eric I. Bustillo, Regional Director of the SEC’s Miami Regional Office. “This is a sad lesson that investors must always be skeptical of claims of high and steady investment returns, even when the manager is recommended by trusted friends or members of one’s own community.”

For the full story, visit the Securities and Exchange Commission website.

View the full SEC Complaint here.