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Life insurance investing firm settles with SEC

On Behalf of | May 8, 2017 | Uncategorized

New York residents may be interested to learn that a management firm along with its CEO have agreed to pay more than $4 million in order to settle charges after they were accused of being involved in a Ponzi scheme. According to the Securities and Exchange Commission, the firm used new investor money to pay earlier investors.

The SEC’s complaint stated that the firm, Verto Capital Management, raised about $12.5 million to allegedly purchase and sell life insurance policies on the secondary market. The SEC alleged that the firm misrepresented its profitability to investors even though it had actually not been profitable for several years. The funds that were raised were reportedly used to pay earlier investors and the CEO.

It was also alleged that the firm specifically targeted religious investors and told them that the investments were strictly short-term with little risk of default. In order to return the money to investors who were harmed, an SEC Fair Fund will be created. The CEO and the firm will pay about $3,400,000 plus interest. They also agreed to pay a $600,000 penalty. The settlement also means that they did not have to admit to or deny the allegations.

When people are accused of this type of investment fraud, the legal consequences could be particularly harsh if they do not seek appropriate legal representation. If they are convicted, they could be sentenced to prison and be required to pay back the funds that they allegedly took. Accordingly, they might find it advisable to meet with a criminal defense attorney as soon as possible so that a strategy to counter the charges can be constructed.

Source:, “Firm, CEO Settle Charges in Ponzi-Like Scheme Involving Life Settlements“, May 5, 2017