Life Partners Holdings, Inc., Brian D. Pardo, R. Scott Peden, and ...

and confidence to not trade in Life Partners securities on the basis of material nonpublicinformation. Pardo and Peden traded in the securities of Life Partners in breach of these duties.156. Defendants Pardo and Peden knew, or were severely reckless in not knowing, thatthe information in their possession was material and nonpublic and that their trading on the basisof the information was in breach of their duties.157. By engaging in the foregoing misconduct, Defendants Life Partners, Pardo,Peden, and Martin, in connection with the purchase or sale of securities, by the use of means orinstrumentalities of interstate commerce or of the mails, or of any facility of any nationalsecurities exchange, directly or indirectly: (i) employed devices, schemes or artifices to defraud;(ii) made untrue statements of material facts and omitted to state material facts necessary in orderto make the statements made, in light of the circumstances under which they were made, notmisleading; and (iii) engaged in acts, practices and courses of business which operate as a fraudor deceit upon persons, including purchasers and sellers of securities.158. By reason of the foregoing, Life Partners, Pardo, Peden, and Martin violated, andunless enjoined, will continue to violate, Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] andExchange Act Rule 10b-5 [17 C.F.R. § 240.10b-5].159. Pardo, Peden and Martin knowingly or with severe recklessness providedsubstantial assistance to Life Partners’ violations of Section 10(b) of the Exchange Act [15U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].160. By reason of the foregoing, Pardo, Peden and Martin aided and abetted LifePartners’ violations, and unless restrained and enjoined will continue to aid and abet suchviolations, of Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder[17 C.F.R. § 240.10b-5].SEC v. Life Partners Holding, Inc., et al. Page 49Complaint