(Bloomberg) — U.S. regulators sued Pacific West Capital Group Inc. over claims it made false promises to clients that its life settlement investments would pay annual returns of as much as 150 percent.
Pacific West and its owner Andrew Calhoun used proceeds from the sale of new life settlements to continue funding previous investments sold years earlier, the Securities and Exchange Commission said in a complaint filed Tuesday. The firm raised almost $100 million selling the securities.
“Investors are entitled to fair disclosures about the risks associated with their investments,” Michele Wein Layne, director of SEC’s regional office in Los Angeles, said in a statement. “Pacific West and Calhoun did the opposite here by hiding and minimizing those risks in order to sell more life settlements.”