Federal regulators say they have agreed to accept a $25 million settlement offer from the former principals of a failed life settlement firm.[@@]
The U.S. Securities and Exchange Commission has filed a civil suit against Joel Steinger, Leslie Steinger and Peter Lombardi, who once led Mutual Benefits Corp., Fort Lauderdale, Fla., in the U.S. District Court in Miami.
If approved by U.S. District Court Judge Federico Moreno, the settlement agreement could resolve the SEC’s investigation of Mutual Benefits marketing practices.
The SEC has accused the defendants in the case of using companies they controlled to defraud about 31,000 Mutual Benefits investors, in part by misrepresenting the life expectancy and longevity of the insureds who had sold their policies to the firm.
The SEC also has accused the defendants of using funds from new investors to pay premiums on older policies.
“In settling, each of the 3 defendants has agreed to consent to the entry of an injunction against future violations of the antifraud and registration provisions of the federal securities laws they were alleged to have violated…without admitting or denying the allegations,” the SEC says in an announcement of the settlement agreement.
Joel and Leslie Steinger, have agreed to each pay $9 million in disgorgement and prejudgment interest and a $500,000 civil penalty, officials say.
Peter Lombardi, Mutual Benefits’ former president, has agreed to pay $5.88 million in disgorgement and prejudgment interest and a $120,000 civil penalty, officials say.