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

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through 145.SEVENTH CLAIM FOR RELIEFViolations of Certifications Rules of the Exchange Act (Exchange Act Rule 13a-14 [17 C.F.R. § 240.13a-14(a)]) [against Defendants Pardo and Martin] 180. The Commission realleges and incorporates by reference Paragraphs 1181. On the following dates, acting under Section 302 of the Sarbanes-Oxley Act of2002 and Exchange Act Rule 13a-14, Pardo and Martin certified Forms 10-K, 10-KSB, 10-Q,and 10-QSB on behalf of Life Partners: May 16, 2008; July 9, 2008; October 10, 2008; January9, 2009; May 29, 2009; July 10, 2009; October 9, 2009; January 11, 2010; May 12, 2010; July 9,2010; October 8, 2010; and January, 10, 2011.182. Further, on January 16, 2007; May 29, 2007; July 16, 2007; October 15, 2007;and January 14, 2008; acting under Section 302 of the Sarbanes-Oxley Act of 2002 andExchange Act Rule 13a-14, Pardo certified Forms 10-K, 10-KSB, 10-Q, and 10-QSB on behalfof Life Partners.183. Specifically, Pardo and Martin certified that they had reviewed these reports andthat, based on their respective knowledge, the reports did not contain any untrue statements of amaterial fact or omit to state a material fact necessary to make the statements made, in light ofthe circumstances under which they were made, not misleading; and, based on their knowledge,the financial statements and other financial information included in the reports, fairly presentedin all material respects the financial condition, results of operation and cash flows of LifePartners of, and for, the periods presented on the reports.184. At the time Pardo and Martin issued these certifications they knew or wereseverely reckless in not knowing that the reports they certified contained untrue statements ofSEC v. Life Partners Holding, Inc., et al. Page 54Complaint
material facts and/or omitted to state material facts necessary to make the statements madetherein, in light of the circumstances under which they were made, not misleading.185. By reason of the foregoing, Pardo and Martin violated and unless enjoined willcontinue to violate, Exchange Act Rule 13a-14 [17 C.F.R. § 240.13a-14(a)] promulgate underSection 302 of the Sarbanes-Oxley Act of 2002.REQUEST FOR RELIEFFor these reasons, the Commission respectfully requests that the Court enter a final judgment:a) permanently enjoining Life Partners from violating Section 17(a) of the Securities Actand Sections 10(b), 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules10b-5, 12b-20, 13a-1, and 13a-13 thereunder;b) permanently enjoin Pardo from violating Section 17(a) of the Securities Act and Sections10(b) and 13(b)(5) of the Exchange Act and Rules 10b-5, 13a-14, 13b2-1, and 13b2-2thereunder, and from aiding and abetting Life Partners’ violations Sections 10(b), 13(a),13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act, and Rules 10b-5, 12b-20, 13a-1, and13a-13 thereunder;c) permanently enjoin Peden from violating Section 17(a) of the Securities Act and Sections10(b) and 13(b)(5) of the Exchange Act and Rules 10b-5, 13b2-1, and 13b2-2 thereunder,and from aiding and abetting Life Partners’ violations Sections 10(b), 13(a), 13(b)(2)(A)of the Exchange Act and Rules 10b-5, 12b-20, 13a-1, and 13a-13 thereunder;d) permanently enjoin Martin from violating Sections 10(b) and 13(b)(5) of the ExchangeAct and Rules 10b-5, 13a-14, 13b2-1, and 13b2-2 thereunder, and from aiding andabetting Life Partners’ violations Sections 10(b), 13(a), 13(b)(2)(A), and 13(b)(2)(B) ofthe Exchange Act, and Rules 10b-5, 12b-20, 13a-1, and 13a-13 thereunder;SEC v. Life Partners Holding, Inc., et al. Page 55Complaint
Page 1:
UNITED STATES DISTRICT COURT FOR TH
Page 6 and 7: spreadsheet of the 300 “most rece
Page 9 and 10: 24. R. Scott Peden, age 47, has ser
Page 11: 32. Pardo hired Cassidy without con
Page 14 and 15: insurance. In fact, contrary to the
Page 16 and 17: E. Defendants Knew that Cassidy’s
Page 18 and 19: oker life settlement interests were
Page 20 and 21: 57. Contrary to Life Partners’ mi
Page 22 and 23: THE ACCOUNTING FRAUD 64. In fiscal
Page 24 and 25: agreement to sell the policy for an
Page 26 and 27: 76. Under GAAP, revenue can be reco
Page 28 and 29: therefore misleading. Based on the
Page 30 and 31: 88. Pardo, Peden, and Martin were a
Page 32 and 33: E. Life Partners Backdated Certain
Page 34 and 35: though all three of its internal cr
Page 36 and 37: Company made it a practice to keep
Page 38 and 39: 118. In a letter to the Company dat
Page 40 and 41: that affects our assumptions about
Page 42 and 43: ecommended that “[a] formal analy
Page 44 and 45: 136. Life Partners’ 2011 Form 10-
Page 46 and 47: 11/3/2008 $36.67 2,866 $105,096.221
Page 48 and 49: through 145.SECOND CLAIM FOR RELIEF
Page 50 and 51: through 145.THIRD CLAIM FOR RELIEFV
Page 52 and 53: 171. By reason of the foregoing, Pa
Page 56 and 57: e) ordering Defendants to disgorge
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