SEC Sues Texas Retirement Planning Firm and Principals for Investment Fraud

On May 11, 2015, the Securities and Exchange Commission (“SEC”) filed suit in the U.S. District Court for the Northern District of Texas against a retirement planning firm and its principals for allegedly misleading investors about the safety of investing in life settlement interests and improperly qualifying some prospective investors.

The SEC alleges that Novers Financial and its principals, Christopher A. Novinger and Brady J. Speers of Mansfield, Texas, sold $4.3 million in life settlement interests to 26 investors from 2012 to 2014. The SEC charges that Novinger and Speers misrepresented the investments as “guaranteed,” “safe as CDs,” and “federally insured,” when in fact they are not.

Interests in life settlements are investments that are based on possible payouts on other people’s insurance policies. They are typically sold to investors who meet a certain net worth or income threshold.

The SEC alleges that to qualify more investors, Novinger and Speers used a net worth calculator that artificially inflated prospective investors’ assets by factoring in future income from pensions and Social Security income. According to the complaint, a potential investor’s non-homestead assets of $263,000 jumped to almost $1.5 million using the net worth calculator, which figured in 20 years’ worth of pension and Social Security benefits the investor anticipated receiving in the future.

The SEC also charged ICAN Investment Group LLC and Speers Financial Group LLC for acting as unregistered broker-dealers. According to the complaint, the SEC is seeking injunctive relief, return of ill-gotten gains with interest and financial penalties.

The Cogdell Law Firm is a boutique law firm focusing on large, complex business and criminal financial-related litigation, including white collar criminal defense, securities fraud, health care fraud investigation, criminal appeals and state criminal defense. When results matter most, contact Dan Cogdell at (713) 426-2244 or info@cogdell-law.com.

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