A publicly traded life settlement company executive has roiled the company Yahoo! stock message board by recommending that investors not lend company shares to short sellers.

Brian Pardo, chairman of Life Partners Holdings Inc., Waco, Texas, has issued a letter to shareholders about the topic through the Business Wire press release distribution service.

“It has come to our attention that a major stock brokerage firm is directly soliciting shareholders of Life Partners to ‘lend’ their shares to the firm,” Pardo writes in the letter. “In return, the firm is offering a small fee for this loan. While completely legal, LPHI management strongly urges all holders of our stock not to lend any shares to anyone and, further, to make it clear to your broker that your shares are not to be loaned out to anyone.”

Some speculators appear to have shorted 1.5 million shares of Life Partners stock, meaning that they have acted on the assumption that the price of Life Partners stock would fall sharply, Pardo writes.

“We also believe that a substantial number of these short sellers have failed to borrow the underlying shares that they have already sold,” Pardo writes. “In order to fulfill the sale, they must borrow or buy shares from current shareholders. Short sellers want the price of the stock to go down. The more the stock price goes down, the more money they make. They can borrow the shares, but only with your permission. If they cannot borrow the shares, they have to buy on the open market.”

The short sellers may be “getting desperate for shares,” Pardo writes. “If, in fact, some of these people failed to borrow the shares they sold first, then let them bear the consequences.”

Some anonymous participants on the Yahoo! message board for Life Partners say Pardo’s letter is a sign the price of the company’s stock will drop. Others are agreeing with Pardo that the shorts look desperate.