NEW YORK, March 18, 2011 (GLOBE NEWSWIRE) -- Shareholders of Life Partners Holdings ("Life Partners" or the "Company") (Nasdaq:LPHI) are reminded of the securities class action lawsuit filed against Life Partners and certain of its officers. The class action (Civil Action No.: 11-cv-0047) pending in the United States District Court for the Western District of Texas is on behalf of a class of all persons or entities who purchased or otherwise acquired LPHI securities during the period from May 29, 2007 through and including January 27, 2011 (the "Class Period"). The Complaint alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.
If you are a shareholder who purchased LPHI securities during the Class Period and would like to serve as lead plaintiff for the class, you have until April 4, 2011 to ask the Court to appoint you. A copy of the complaint can be obtained at . To discuss this action, contact Rachelle R. Boyle at rrboyle@pomlaw.com or 888.476.6529, toll free. Those who inquire by e-mail are encouraged to include their mailing address and telephone number.
Life Partners is the parent company of Life Partners, Inc. ("LPI"). LPI is engaged in the secondary market for life insurance known generally as "life settlements." Life Partners facilitates life settlement transactions which involve the sale of existing life insurance policies to purchasers who receive the death benefits under a policy when the insured dies.
The action alleges that during the Class Period, defendants made false and/or misleading statements, as well as failed to disclose material adverse facts about the Company's business, operations, and prospects. Specifically, defendants made false and/or misleading statements and/or failed to disclose: (1) that the Company had routinely used unrealistic life expectancy data that produced inaccurately short life expectancy reports, which were subsequently used to sell life settlement policies to investors; (2) that the Company had purposely concealed the historical rate at which individuals insured by life settlement policies sold by Life Partners had lived past the life expectancy rates previously provided to investors, such that the Company's investors were unable to assess the accuracy or reliability of such data; (3) that by underestimating the life expectancy data to investors, the Company was able to charge substantially larger fees when brokering life settlement policies; (4) that the Company's revenues had been significantly increased through the employment of such business practices; (5) that, as a result, the Company's financial statements were false and misleading at all relevant times; (6) that such business practices, when they were discovered, would initiate an investigation by the federal authorities into the Company's business practices; (7) that the Company lacked adequate internal and financial controls; and (8) that, as a result of the foregoing, the Company's statements about its financial well-being and future business prospects were lacking in any reasonable basis when made.
On January 20, 2011, The Wall Street Journal published an article disclosing that the SEC was investigating Life Partners' business practices relating to how the Company estimated the life expectancies of the individuals whose life insurance policies the Company was selling the rights to. Later that day, the Company confirmed the investigation. On this news, shares of Life Partners declined $3.15 per share for two trading sessions, to close at $11.54 per share on January 21, 2011.
On January 27, 2011, The Wall Street Journal published an article that disclosed that Life Partners had drastically changed how it would market its products to investors. Specifically, the article disclosed that Life Partners would now market their product as having an estimated return of 7% over seven years, instead of the targeted 12% to 14% annual returns over shorter periods, typically four to six years, it had previously promoted. On this news, shares of Life Partners declined by $1.14 per share or 9.60%, to close at $10.70 per share on January 28, 2011.
The Pomerantz Firm, with offices in New York, Chicago and Washington, D.C., is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 70 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members.
CONTACT: Rachelle R. Boyle Pomerantz Haudek Grossman & Gross LLP 888-476-6529 (ext. 237) rrboyle@pomlaw.com