by Structured Settlement Watchdog
Move over Buffalo wings, Buffalo business has some new “hot sauce”
A spicy combination of structured settlement brokerage, settlement planning and structured settlement factoring originations
Buffalo settlement planning firm and structured settlement brokerage, Milestone Consulting, is also an origination firm for structured settlement transfers, according to correspondence from its CEO to one of our sources last month. Milestone Consulting’s CEO John Bair claimed in an October 2018 email from his milestoneseventh.com email address (that I have obtained from its recipient), that Milestone is “the only primary market, as well as origination firm for secondary market transfers that I’m aware of”. Read Structured Settlement Agency Claims “Only Primary Market, As Well As Origination Firm for Secondary Market Transfers”.
Bair has been teasing the story since March 2018 in a series of blog posts on the Legal Examiner, Milestone edition.
In June 2018, it was notable that all images on enuities.com featured people of color. A call to the website’s phone number on June 15, 2018, prompted a return call from Milestone Consulting, which, upon information and belief, is affiliated with most structured settlement annuity carriers and maintains strong connections within the trial lawyer community. The agency has previously advertised, and apparently continues to promote, the use of structured settlement receivables with current plaintiffs or their attorneys. According to a company representative, the platform was set to launch in Fall 2018; earlier in June, it had been described as merely gathering names and information about structured settlement annuitants. The representative also indicated that the firm had retained Earl Nesbitt of Nesbitt Vassar McCown LLP, a Dallas attorney well connected to the National Association of Settlement Purchasers.
In June 2017, Seventh Amendment Holdings, LLC applied to the United States Patent and Trademark Office (USPTO) to trademark “Structured Settlement Exchange.” The USPTO rejected the application for being descriptive, meaning it couldn’t trademark a term that merely described the service. As the holding company for Milestone Consulting, Seventh Amendment Holdings appealed. On April 3, 2018, the USPTO upheld and finalized the refusal. However, on August 7, 2018, the trademark was registered after an acceptable amendment was made. USPTO records show the first use in commerce was on June 13, 2018, and the trademark application listed the same phone number as Milestone Consulting, 716-883-1833.
See Structured Settlement Exchange Trademark Electronic Search System (TESS)
Copy of Registration Certificate
Evidence of Alleged Use submitted June 25, 2018 to USPTO
The Optics
Structured settlement factoring is not illegal. Structured settlement secondary market origination of structured settlement payment rights (receivables) is not illegal
The concept of a structured settlement exchange is not inherently flawed. However, despite what may have been well-intentioned origins, shared ownership and operation with an individual or entity that controls a structured settlement general agency—particularly one that directly or indirectly provides pre-settlement loans and simultaneously markets structured settlement derivatives to investors—raises concerns. These concerns are heightened when such interrelationships are not transparently disclosed on the organization’s website.
Milestone is not alone in that regard.
Few members of the structured settlement primary market discuss their involvement in structured settlement factoring, presumably due to a fear about the optics
That needs to end. The structured settlement secondary and tertiary markets are in a period of transition. In the last 5 years there has been an unprecedented amount of unconscionable business conduct in the structured settlement secondary market, by both factoring companies and their agents as well as members of the bar, that has cost annuitants millions of dollars.
Milestone Consulting is not a member of the National Structured Settlements Trade Association and thus not subject to its bylaws, which addressed the subject in 2006 and reiterated it in early 2012. In June 2012 the NSSTA Board then issued a letter concerning recycled payment rights or structured settlement receivables (which are not annuities but labeled such by some marketers), followed by an April 5, 2014 memorandum to members by Hogan Lovells US LLP, counsel to NSSTA about the marketing and distribution of structured settlement payment rights. Patrick Hindert, a blogger, who is now with Independent Life, wrote in 2012, “It is common knowledge within the industry that multiple structured settlement annuity providers (NSSTA members), or their affiliates, are active purchasers of structured settlement payment rights after those payment rights have been securitized by structured settlement factoring companies. NSSTA, however, has made no apparent attempt to investigate and/or punish members who promote structured settlement factoring as purchasers thereby helping to generate demand”.
What Should a Structured Settlement Exchange Look Like?
- Independently operated and managed, not tied to any structured settlement general agency, by common ownership, affiliation or otherwise.
- The exchange and its participants should be regulated.
- The marketplace must be transparent When you buy health insurance you can see exactly which companies are on the exchange up-front, without being in a password protected area.
When I asked John Bair on June 27, 2018 if it was possible that we can speak constructively, in good faith , on broad terms about concepts (e.g. purpose, transparency, ownership, regulation) Bair stated he would only speak with me if I signed an NDA. The NDA proffered included a 3 year non compete and a $100,000 liquidation of damages clause. I respectfully declined given the significant information I had already pieced together.
Read Structured Settlement Exchange | What Would a Real Structured Settlement Exchange Look Like? June 18, 2018
More questions…
- Will Milestone Consulting’s actions encourage other primary market settlement consultants to openly engage in their structured settlement factoring business?
- What sets Milestone’s approach to structured settlement exchanges apart from other platforms where buyers compete, like Genex Capital’s SSQ and Settlement Exchange, LLC?