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Life Partners gets second SEC Wells Notice

(Reuters) - Life Partners Holdings Inc said it received an amended Wells Notice from U.S. regulators, which includes allegations on disclosure regarding its accounting policies and practices.

Last month the company, which is active in the secondary market for life insurance, had received a Wells Notice in May for proposed civil action related to accuracy of estimates of life expectancies of settlers.

According to the expanded Wells notice, the U.S. Securities and Exchange Commission could bring a civil injunctive action against the company and three of its directors and executive officers, Brian Pardo, R Scott Peden and David Martin, for possible violations of certain sections of the Securities Act.

The expanded notice also includes allegations about the disclosures regarding certain accounting policies and practices, including revenue recognition and the impairment of life settlements held by the company for investment.

Regulators send Wells Notices to companies or people to alert them of the likelihood that the government will file an enforcement action against them.

Companies or people being investigated have the right to argue why they should not be charged by filing a “Wells submission.”

On June 3, the company said it had received a Nasdaq letter for not complying with listing norms.

Life Partners shares closed at $3.90 on Monday on Nasdaq.

(Reporting by Aditi Sharma in Bangalore; Editing by Gopakumar Warrier)

Source: Reuters
http://www.reuters.com/article/2011/06/06/lifepartners-idUSL3E7H62WR20110606

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