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March 04, 2011 at 07:00 PM
The U.S. Securities and Exchange Commission (SEC) has charged a former investment advisor with stealing investor money that was supposed to be used to buy in-force life insurance policies.
The SEC has filed a civil suit in the U.S. District Court in Oakland, Calif., against Steven T. Kobayashi, who once worked as a financial advisor in the Walnut Creek, Calif., office of UBS Financial Services L.L.C.
Kobayashi formed a limited liability company, Life Settlement Partners L.L.C., Pleasanton, Calif., to help wealthy clients invest $1.4 million in life insurance policies in December 2004, SEC officials allege.
Kobayashi used some of the cash to buy about 25 life policies and at first operated Life Settlement Partners as a legitimate business, officials say.
Later, Kobayashi used firm assets, cash from a line of credit, and cash borrowed from the UBS and Life Settlement Partners to “pay enormous gambling debts, to hire prostitutes, and to buy luxury cars,” officials say.
Kobayashi resigned in 2009, shortly after a customer reported him to UBS. UBS then reported him to the SEC.
