by Structured Settlement Watchdog
Bravo to Robin Shapiro of Novation Capital for identifying bad business practices in the structured settlement secondary market and making the poignant observation that "If not addressed, "this kind of stuff is going to provoke a regulator and investor reaction that none of us is going to like. The answer is not simply making speeches here or making 'representations' that the rules are being followed. We're past that."
Robin Shapiro's presentation at the 2013 NASP annual conference was chronicled by Patrick Hindert of S2KM on his blog Beyond Structured Settlements.
In addition to the revelation that a significant number of structured settlement transfer orders were allegedly falsified by a New York law firm that represents many factoring companies, Shapiro is said to have highlighted and criticized other secondary market bad business practices such as:
- Inter-state Forum Shopping – "It has been reported that some factoring companies are signing up out-of state sellers to do deals in jurisdictions where judicial scrutiny is known to be limited — listing what turns out to be a PO Box as their residence address."
- Short-cutting Waiting Periods and Disclosure Requirements – Some factoring companies require sellers to "sign contracts and backdate [Shapiro's emphasis] disclosures so as to make it appear, at least in a paper file, that the seller was afforded the statutory 10 day wait between disclosure and signing."
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Expediting Hearing Dates Before Preferred Judges – "Counsel for originators file multiple 'John Doe' court petitions as place-holders in a busy court, amending later with specific names and amounts, to secure an expedited hearing date and perhaps a hearing before a preferred judge."
- "Competing Bids" from the Same Company – Consumers "get what appear to be 'competing bids' from two or more brands that are really one and the same company. The consumer thinks they've shopped around. Later, when the consumer discovers the truth, they feel tricked. And they complain – online and elsewhere."
Let's focus on the last bullet point for this post.
The structured settlement secondary market scuttlebutt focuses on how JG Wentworth and Peachtree play off each other, the gist of it that purportedly each company will refer business to the other when there is common ownership so there is not really any competive bidding going on. Are there any others?
Nicholas Jackson, of Missouri based Jackson Structured Funding (SYSS), has done search engine optimization work for both Sovereign Funding and Genex Capital.
He claimed that Roger Proctor and David Springer 'have been partners for a while and control various sites' (5 at the time the time he disclosed this May 24, 2012)
During the course of the time he worked with Sovereign Funding Group, he made, or was supplied, with a screenshot of David Springer's Outlook desktop on March 5, 2012 at 545pm, which included a detailed record of calls received from Structured Settlement Quotes (SSQ) that clearly shows that calls from the Antietam call center for SSQ were routed to Roger Proctor and Boris Drubetsky of Genex Capital and to David Springer of Sovereign Funding Group. Jackson voluntarily shared this screenshot with me on May 25, 2012 at 7:24pm EDT. One of the Outlook folders is labeled CS-SSQ, presumably Call Center SSQ.
Adding further juice to the connection, David Springer has already admitted that James Spelling was one of his fake names in his June 28, 2013 deposition in the Woodbridge case. Moreover a testimonial about Andrew Cravenho and James Spellmg appears on the SSQ website, as does James Goldstein, another one of David Springer's admitted "noms de plume", in connection with Sovereign Funding, 4 months after Springer's deposition.
Jackson stated to me in writing on May 24, 2012 that he "refused David (Springer) personally to set up a site that give (sic) a fake name to the BBB and was rigged versus having bidding'. David Springer subsequently testified 13months later, that the names that he submitted to the Better Business Bureau on behalf of Sovereign Funding Group were fake.
SSQ claims up to 6 structured settlement annuity buyers will compete to purchase the rights to your annuity payments. it does not list its "certified funders".