Important note: Information in this article was accurate in 1995. The state of the art may have changed since the publication date.
Important note: Information in this article was accurate in 1995. The state of the art may have changed since the publication date.
Reuters NewMedia, Inc. - 10 Oct 1995
The Securities and Exchange Commission charged the Waco, Texas-based company and its president last year with selling millions of dollars in unregistered securities.
A federal court then issued an injuction against the company in August.
Life Partners, which buys the life insurance policies at a discount to give AIDS patients immediate access to cash, has contended that it is selling insurance and is not subject to SEC's registration requirements.
Last year, the company did $155 million of business in the $300 million "viatical" settlement industry, the largest single company in the field.
In the latest court ruling, the SEC said the court held that it was "not at all clear" that the defendants had taken their operations outside the scope of securities laws.
"In essense, defendants seek to create a judicially sanctioned substitute for proper securities laws," the SEC quoted the court as saying.
The court also held that the defendants' proposals "cannot supplant the registration requirements Congress has chosen to adopt," the SEC said.
The court had previously acknowledged in that ruling that Life Partners performed a beneficial service to AIDS patients and that no complaints had been filed against it by buyers and sellers of AIDS-related insurance policies.
Life Partners President Brian Pardo's office said he was out of town and could not be reached for comment.
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