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Life Partners files Compliance Report; clarifies status of SEC litigation.

WACO, Texas--(BUSINESS WIRE)--Oct.23, 1995--"Life Partners has developed revised methods of operation that it considers sufficient to eliminate any claim that the securities laws apply," president Brian D. Pardo announced in a sworn report filed in federal court on October 15, 1995.

The Securities and Exchange Commission is to file a response to the report by Nov. 2, and the Court then will consider the matter.

Life Partners acts as a buyers' agent in viatical transactions, which enable AIDS patients and others with terminal illness to obtain cash for their life insurance policies prior to death.

Pardo's report states that Life Partners' "basic compliance strategy is to revise our business to the extent necessary to satisfy the Court that we are acting as brokers or intermediaries in the sale of property." It says that if the SEC or the Court conclude that further revision is necessary, Life Partners is "open to discussion."

Although the SEC has not yet commented on the specific steps outlined in Pardo's report its court filings have recognized that (i) viatical transactions are not inherently securities, (ii) the participation of an agent or other intermediary does not necessarily trigger the securities laws, and (iii) the preliminary injunction issued on Aug. 30, 1995 permits Life Partners to comply "by restructuring the transactions in such a way that they do not constitute securities."

In numerous interviews, Pardo has stated that he regards these key points to be "settled," and that Life Partners has "resolved" to comply with the preliminary injunction. However, reports that the entire litigation has been finally "settled" or "resolved" are premature and inaccurate. At the present time, the case remains open. Life Partners is under orders to bring its business into full compliance, it has announced a plan that it believes will suffice, and that plan is under consideration by the Court and the SEC.

In the meantime, Life Partners is implementing its new procedures while continuing business to avoid disruption of the necessary flow of funds to viatical sellers.

CONTACT: Scott Peden, 817/751-7797


Ida W. Draim, 202/429-7000


Mark B. Leeds, 212/819-0769
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Publication:Business Wire
Date:Oct 23, 1995
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