Printer Friendly

STATE OFFICIALS TO WARN OF RISING AIDS-RELATED INVESTMENT SCHEME

STATE OFFICIALS TO WARN OF RISING AIDS-RELATED INVESTMENT SCHEME
 First State Action Against Illicit Firm Promising 'Big Bucks' to Small Investors will be Announced; Promoters Claim to Match-UP People with AIDS and Investors, Raise Serious Risk, Disclosure Issues
 A new investment scheme preying on the AIDS crisis is on the verge of breaking out across the United States, and will result in "major, multi-million-dollar-losses" if now unwary consumers do not learn to avoid it, according to an urgent national warning to be issued by the North American Securities Administrators Association (NASAA).
 The warning to the public will be unveiled at 10 a.m. EDT, Wednesday, Aug. 19, at the National Press Club, Edward R. Murrow Room, 14th and F streets N.W., Washington. (NASAA is the national organization of the 50 state securities agencies.) The event also will be marked by the announcement of the first state action against one of the illicit firms in question. A related NASAA warning bulletin will be made available to consumers at no cost.
 State regulators are concerned by the recent rise of firms promising investors "Big Bucks" if they cash out at a discount the life insurance policies of people with AIDS and then are named as the main beneficiary. Typically, an investor is told that he or she can expect to reap $35,000 or more in the nine-12 months that a person with AIDS has left to live. The schemes are spurring serious questions about compliance with securities registration requirements, the adequacy of risk disclosure, and privacy, since what appear to be very personal health details are revealed in "menu style" sales materials provided to potential investors.
 The dubious schemes differ from legitimate "living benefits" programs offered by major insurance companies and 20 or so smaller companies in the United States. The schemes appear to be capitalizing on the headline-grabbing AIDS story and the increase in awareness about companies that buy life insurance policies from people with AIDS. Promoters of investment schemes often seek to "cloak themselves in the legitimacy of news reports and legal enterprises," according to NASAA.
 Those participating in the NASAA event will include:
 -- Lewis Brothers, president, North American Securities Administrators Association (NASAA), the national organization of the 50 state securities regulators.
 -- North Dakota Securities Commissioner Glenn Pomeroy.
 -- Stephen W. Kraus, senior counsel, American Council of Life Insurance.
 -- David Petersen, a retired New York financial planner who has AIDS and is an independent expert on "living benefits" and similar programs.
 NOTE: A live audio feed from the news conference will be available on a toll-free basis. Interested parties may listen in by dialing 800-220-5050 by 9:55 a.m. EDT on Aug. 19 and "signing on" to the call.
 CONTACT: Scott Stapf, 703-276-1116 or, after hours, 703-524-8417, for NASAA.
 -0- 8/18/92 R


CO: North American Securities Administrators Association ST: District of Columbia IN: FIN HEA INS SU:

TW -- DC002 -- 0986 08/18/92 13:12 EDT
COPYRIGHT 1992 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Aug 18, 1992
Words:490
Previous Article:WEST PUBLISHING COMPANY ANNOUNCES MAJOR CONTRACT WITH COOPERS & LYBRAND
Next Article:BALLY MANUFACTURING RESTRUCTURING PROCEEDING AS PLANNED; CORPORATION REFUTES ACCURACY OF NEWS SERVICE REPORT
Topics:


Related Articles
Power prices rocket as 2,000 jobs axed.
China could be world's AIDS leader by 2010, experts warn.
California Senate Joins AIDS Drug Pricing Fray.
Should SARS scare you? And do people with HIV have more trouble fighting this new virus? (Health).
2 DAY IN 2 MINUTES: home and abroad.
H.K. monetary chief warns of sting from subprime mortgage woes.

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters