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Featured Advisor

Srbo Radisavljevic
Managing Principal/Investment Advisor

Edge Portfolio Management


State: IL

At Edge, a low client to advisor ratio allows for personal and customized service for each individual.  Our goal is to work as a team for each client to provide not only portfolio management but wealth coordination and financial planning.  We make every effort to have frequent communication with our clients and to provide timely response to calls and emails.  I also enjoy spending time with my wife and three kids, following Chicago sports, enjoying ethnic cooking, and serving as a school board member for Norridge School District 80.

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Emergency Court Injunction Spotlights Life Settlement Perils

Life settlement broker accused of Ponzi scheme.

A court hearing will be held on Sept. 15 on the Securities and Exchange Commission’s (SEC) motion for a preliminary injunction against Daniel C.S. Powell and his Los Angeles-based company Christian Stanley Inc. The SEC alleges that the life settlement broker has” spent the past seven years creating the illusion that it was a legitimate company involved in the life settlement industry.”

According to an SEC statement released last week, “Christian Stanley has never purchased or generated any revenue as a result of brokering the sale of a single life settlement, and has barely derived any revenue from any of its purported business ventures.” The emergency court order halted an alleged $4.5 million investment scheme. Powell raised funds from at least 50 investors nationwide. They were allegedly promised fixed interest rates ranging from 5 to 15.5 percent annually for five-year terms, the SEC said. Powell claimed the notes were backed by assets such as a Nevada gold mine and a Kentucky coal mine with deposits valued at $11.8 billion. Instead, the money was used toward school loans, luxury hotels, nightclubs and restaurants, high-end vehicles as well as $5,000 for cowboy boots and nearly $5,000 to register for a dating service. .”

A life settlement “is a transaction in which an individual with a life insurance policy sells that policy to another person, who then assumes responsibility for paying the premiums,” the SEC explained in its statement. “Typically, the seller no longer wants the policy or can no longer afford to pay the premiums. In exchange, the insured party typically receives a lump sum payment that exceeds the policy’s cash surrender value, but is less than the expected payout in the event of death.”

The Financial Industry Regulatory Authority (FINRA) advises life settlement investors to “proceed with caution.” As the Powell case illustrates, the trades take place in a poorly-regulated environment that leaves seniors in particular vulnerable. The average ages of policyholders involved in life settlements in 2008 was 76.8 years for men and 81.1 hears for women, according to a Government Accountability Office survey.

As Millionaire Corner previously reported, FINRA urges policyholders to thoroughly research a proposed life settlement. A growing number of state insurance and securities commissions are regulating the industry, FINRA said, and these agencies can be contacted to see whether the broker or company has a record of complaints.