Articles Tagged with Future Income Payments

Stoltmann Law Offices, a Chicago-based securities and investor rights law firm continues to investigate claims by investors who were sold investments in the fraudulent note scheme Future Income Payments. Investors have rights and if you were solicited to invest in Future Income Payments by your financial advisor, you may have a claim to pursue for negligence or fraud. According to an article that appeared on ThinkAdvisor, former SagePoint financial advisor Troy Baily solicited several clients to invest in securities offered by Future Income Payments (“FIP”).  FIP turned out to be a multi-million dollar pension scam with investors losing everything.  According to the article, Baily submitted to what is called an “Acceptance, Waiver, and Consent” with the Financial Industry Regulatory Authority as a result of these ill-fated solicitations.

An AWC  is essentially the formal settlement of a regulatory investigation conducted by FINRA of a licensed financial advisor. In this instance, Baily accepted FINRA’s conclusion that he solicited four SagePoint clients to invest a total of $210,000 in securities offered by Future Income Payments.  In so doing, he violated FINRA Rule 3280 and FINRA Rule 2010. As punishment for his violations, Baily accepted a six-month suspension and a fine in the amount of $5,000.  Although an AWC is technically not an admission of fault or guilt, the facts alleged by FINRA are clear and do not require interpretation – Baily sold FIP investments to his SagePoint clients.

The best bet for victims, especially those who were Baily’s clients, is to pursue his broker-dealer, SagePoint through FINRA Arbitration. As we have said in the past, brokerage firms are ultimately responsible and liable for the misconduct of their agents. Here, there are two separate routes investors can take to recover against SagePoint. The first is through the legal theory of apparent agency, or Respondeat Superior. This is an age-old legal concept that the principal is responsible for the conduct of its agent, so long as the conduct is performed in the course and scope of that agency relationship. Here, Baily sold securities, provided investment and financial advice, to clients to invest money in FIP. That is clearly within the scope of his agency relationship with SagePoint.

AdobeStock_194438920-300x200Stoltmann Law Offices is interested in speaking to those individuals who may have lost money in Future Income Payments, LLC, also known as Pensions, Annuities, and Settlements, LLC. Future Income Payments and its owner, Scott Kohn, have been subject to regulatory action in numerous states including, Washington, California, Colorado, Iowa, Indiana, North Carolina, New York, Massachusetts, Pennsylvania and Virginia. The Consumer Financial Protection Bureau (CFPB) served Future Income Payments with a Civil Investigative Demand in November 2016. It is alleged that Future Income Payments engages in agreements that are sales of pensions and not loans. Regulators have claimed that the company misstates the effect of the contract and that, in fact, pensioners are entering into a consumer loan and not a sale.
The purpose of these misrepresentations is to try to exempt Future Income Payments’ loans from consumer lending laws and regulations and to collect interest on loans at illegal rates. The consumer receives a sum of money that he is obligated to repay. The company’s contract specifies the consumer’s future pension payments that actually constitute a repayment schedule for a loan. Interest rates for the loan in some examples reached 130% a year. Regulators state that hundreds of retirees have been subject to the alleged fraud. 282 New York pensioners allegedly received amounts anywhere from $2,500 to $58,000 while being charged interest rates as high as 130% a year between March 2012 and April 2015. The state of Virginia stated that elderly veterans with military pensions were being targeted for the illegal loans by Future Income Payments.
FIP Investments were sold primarily by insurance agents, and were, in some cases, at the behest of their Independent Marketing Organization (IMO). Customers were sold this product as an investment vehicle targeted to grow income. This income was then used to fund insurance products, such as index universal life insurance policies (IULs), or to supplement the customer’s income. You may be able to recover your losses if you were sold FIPs by your insurance agent.

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