The SEC action against Woodbridge Wealth and Robert Shapiro and the connection between a founder of SHP Financial and Woodbridge Wealth and Woodbridge Structured Funding has led me to have a relook at SHP Financial and the research that I published in 2014. This information is useful to provide historical context and from a regulatory and legislative standpoint as part of our ongoing efforts to curtail questionable methods of selling structured settlement receivables to investors.
I started tracking SHP Financial tweets in mid-February 2014 and discovered the Plymouth,MA company tweeted outrageous and misleading information about structured settlement payment rights, to investors. I’m surprised that it made it past the compliance department. For example:
1.”Buying this $29k #StructuredSettlement is like buying piggybacked 4yr- and 5yr bank CDs: ROI 5%, receive $15k after 4yrs and $25k 5yrs later”
8:05 AM – 20 Jan 2014″
2. “Keith says this A-rated #StructuredSettlement is like an 11yr CD… only better: buy for $29k, enjoy annual 5.15% ROI; payout of $50k in 2024”. December 9, 2013
3. “Keith has a $67k #StructuredSettlement that’s like a 5+yr 4.15% Bank CD with BONUS: you get back ⅓ in < 1yr and another ⅓ in < 2yrs. A+ co” November 12, 2013 443am
SHP Financial has since deleted the tweets. But a collection of them were preserved in our posts. Download SHP Financial (shpfinancial) on Twitter Use of Prudential logo used to sell payment rights as bank CD 4-15-2014 { the attachment shows an assortment of tweets showing how these receivables were promoted “just like a CD”
Keith is Keith Ellis and Matt is Mathew Peck, Partners at SHP Financial and you can see Keith in a video published July 8, 2012 pitching structured settlement transfers, some of which, upon information and belief were sourced from Woodbridge. {Source: Testimony of Charles Nisolek before Massachusetts Securities regulators Enforcement Section #78 and #79 “Woodbridge had in their efforts to recruit financial advisors and financial professionals around the country and reached out to one of my colleague at SHP Financial and educated them on another product they have called structured settlement transfers, and that’s how we– that’s how we originally met” . In this YouTube video Keith Ellis and another gentleman were seen discussing structured settlement transfers and explicitly discussing the state guarantee funds.
Structured settlement receivables are not CDs and they are not even annuities
No FDIC coverage. Acquisition is by Receivables Purchase Agreement
Despite these facts, SHP Financial pushed these structured settlement receivables using the logos of structured settlement annuity issuing life insurance companies, until the life insurers were notified and cease and desist letters were sent.
Postscript
In 2017, the Life & Health Guaranty Association Model Act (#520) was amended with express exclusions for acquired structured settlement payment rights regardless of whether the rights were acquired before or after the adoption by the states
PROJECT HISTORY – 2017
LIFE AND HEALTH INSURANCE GUARANTY ASSOCIATION MODEL ACT (#520)
Description of the Project, Issues Addressed, etc.
At the 2013 Summer National Meeting, the Rhode Island Insurance Division requested that the Receivership and Insolvency Section (E) Task Force study the topic of guaranty fund coverage of life settlements and factored structured settlements.
At the 2013 Fall National Meeting, the Task Force heard presentations about life settlements and factored structured settlements from industry trade groups, including the National Organization of Life and Health Insurance Guaranty Associations (NOLHGA), the National Structured Settlements Trade Association (NSSTA), the Life Insurance Settlement Association (LISA) and the American Council of Life Insurers (ACLI). Life settlements and factored structured settlements were identified as being different types of products. The Task Force limited its focus to factored structured settlements.
The Task Force postponed further discussion on the topic until 2015, when the ACLI had completed its own policy discussion. The ACLI presented clarifications for Model #520 to the Task Force at the 2015 Spring National Meeting for discussion purposes. The Task Force requested comments on the topic and received no objection to proceeding with revisions to Model #520. The Task Force submitted a Request for Model Law Development, which was adopted by the Executive (EX) Committee on Nov. 20, 2015.
” Inapplicability of Guaranty Association coverage to factored structured settlement annuity benefits”
The Task Force proposed to amend applicable sections of Model #520, including Section 3(A)5 and Section 3(B)2, as well as any other sections deemed relevant to this topic, to provide clarity with regard to the inapplicability of guaranty association coverage to factored structured settlement annuity benefits.
Source: National Association of Insurance Commissioners