Subject: SEC Case Involving Viatical Settlements Is Settled With $950,000 in Payments
Date: Published:  05/04/98 (43 lines of text)
Source: Wall Street Journal.  Copyright Dow Jones & Co. Inc.

SEC Case Involving Viatical Settlements
Is Settled With $950,000 in Payments

By Paul Beckett

   WASHINGTON -- Two Florida brothers agreed to pay a total of $950,000
to settle Securities and Exchange Commission fraud and registration
charges stemming from the sale of approximately $100 million of viatical
settlements.
   Viatical settlements are interests in life-insurance policies of the
terminally ill, usually AIDS patients.
   In a complaint filed in federal court in Miami, the SEC alleged that
Joel Steinger, 47 years old, and Leslie Steinger, 42, through Mutual
Benefits Corp. misled almost 1,200 investors nationwide from October
1994 to April 1996.
   The SEC said the Steingers founded and controlled Mutual Benefits,
Fort Lauderdale, Fla., one of the country's largest viatical settlement
companies.  The agency claimed the settlements were unregistered
securities, and said investors were told they held irrevocable interests
in certain policies when they didn't.
   The SEC also said the Steingers failed to disclose that investor
funds would typically be held by Mutual Benefits for several weeks or
more before being placed on a policy, which reduced the investment's
annual rate of return.
   Without admitting or denying the allegations, the Steingers, both of
Pompano Beach, agreed to pay $850,000 in disgorgement and interest, and
to pay $50,000 each in civil penalties.  They were also barred from
future violations of the registration and antifraud provisions of the
securities laws.
   Richard Ben-Veniste, an attorney for the company and the Steingers,
noted that no investor money had been lost, that the company wasn't
named in the SEC action, and that it was still in business.  He
attributed the principal SEC complaint to specific rules governing the
life-insurance policies of servicemen and characterized the other
allegations as technical.
   SEC officials said the agency maintains that viatical settlements are
securities.  In November, a federal judge in Washington dismissed a
similar case in which the SEC accused a Waco, Texas, company of selling
unregistered securities.
NS    LWS RGU WSJ 
GV    SEC 
RE    FL NME US USS 
JN    LMJ 
DNS   Lawsuits; Securities Regulation; Wall Street Journal
DGV   Securities and Exchange Commission
DRE   Florida; North America; United States; Southern U.S. 
DJN   Large Majors


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