National Roundup

Texas

SEC sues life settlements firm, alleges deception

WACO, Texas (AP) -- Federal securities regulators filed suit Tuesday against a Texas-based provider of so-called "life settlements," accusing it and three top executives of defrauding shareholders by overvaluing the life insurance policies it buys from its customers.

In a statement, the Securities and Exchange Commission said Life Partners Holdings Inc. and its top management lowballed life-expectancy estimates used to price the settlements they pay customers.

With life settlements, policyholders sell their life insurance policies in return for a lump-sum payment. Investors buy the right to collect the policy's death benefits, but must continue to pay premiums until the original policyholder dies.

The lawsuit the SEC filed in federal court in Waco, Texas, also names as defendants the company's founder, chairman and chief executive, Brian Pardo, its president and general counsel, R. Scott Peden, and Chief Financial Officer David Martin.

In its civil complaint, the SEC alleges that Life Partners and its executives engaged in deceptive disclosures and improper accounting to overvalue its assets and exaggerate its revenue stream from brokering life settlements. The SEC also accused Pardo and Peden of insider trading.

"Life Partners duped its shareholders by employing an unqualified medical doctor to assign baseless life-expectancy estimates to the underlying insurance policies," said Robert Khuzami, head of the SEC's enforcement division. "This deception misled shareholders into thinking that the company's revenue model was sustainable when in fact it was illusory."

Waco-based Life Partners said the lawsuit is "without merit," and it promised a vigorous defense.

"It is very disappointing that the SEC has chosen to pursue litigation over issues that we believe have no merit and financial presentation issues that we do not believe are material," Pardo said in a company statement. "We have always done our best to deliver value to our shareholders and to run an honest and transparent company."

California

AT&T to pay $215M to TiVo to settle patent suit

LOS ANGELES (AP) -- AT&T Inc. will pay TiVo Inc. at least $215 million through June 2018, becoming the latest TV signal provider to settle a patent lawsuit involving the digital video recorder pioneer.

Per subscriber, this payout will be much larger than a similar $500 million settlement TiVo reached in May with satellite TV company Dish Network Corp. and its set-top box provider, EchoStar Corp.

Dish had about 13.9 million subscribers at the end of September, while AT&T's U-verse had just 3.6 million. That makes AT&T's settlement worth at least $59.72 per subscriber, while Dish's cost $35.97 per subscriber.

TiVo CEO Tom Rogers said the bigger settlement resulted in part from the fact that AT&T heavily marketed its digital video recorders as a key difference between itself and bigger cable TV providers.

"From the get-go, their offering was primarily based on DVR," Rogers said. He added that TiVo is pursuing another similar case against Verizon over its FiOS service. He said marketing for FiOS also emphasizes its DVRs. Verizon has about 4 million video subscribers.

TiVo shares jumped $1.15, or 12.9 percent, to $10.07 after hours on the news, while AT&T shares rose 21 cents to $30.59 after hours. TiVo's stock had fallen 5 cents in regular trading Tuesday as the markets rose overall.

A spokesman for AT&T declined to comment.

AT&T will pay more than $215 million if subscriptions to its U-verse television package rise in line with forecasts, TiVo said.

The first $51 million was due in a lump sum on Tuesday, with another $20 million due in the first year and quarterly payments after that.

The settlement will bring TiVo's operations closer to profitability, Rogers said.

Founded in 1997, TiVo developed the first commercially available digital video recorder, making it easy for people to record programs and watch them later and to skip through advertisements. The innovation changed the way ratings agency Nielsen measures audiences as more people began watching shows well after they aired.

Massachusetts

Mom asks police to arrest bickering teens

SALEM, Mass. (AP) -- A Massachusetts woman fed up with her bickering children called police and asked responding officers to arrest two of them.

The Salem woman told police who came to her home on Monday evening: "Arrest them both -- I can't take this anymore."

The woman said her five children had been fighting all day but things came to a head when her 15-year-old son hit her 8-year-old daughter, and a 16-year-old daughter intervened to protect her sister.

The Salem News reports that when police asked what they could do, the mother said she wanted the teenagers arrested.

Instead, police say they will summon the 15-year-old boy to court for hitting his younger sister. Police also notified state child welfare authorities.

No names were released.

New Mexico

Sheriff: Scientist was still working on bombs

ESTANCIA, N.M. (AP) -- A New Mexico sheriff says a retired Sandia Labs scientist was apparently building bombs at his home before he died.

Torrance County Sheriff Heath White tells KOB-TV it appears 81-year-old David O'Keefe spent his retirement on the outskirts of Estancia continuing his work up until he died a few months ago.

White says O'Keefe was trying to make a new type of explosive and was experimenting with different chemicals and different compounds to make that explosive, which put neighbors within a half mile in great danger.

Deputies discovered the explosives Saturday when the property owner went to check on the home and found the chemicals.

White says cleanup will take some time.

Illinois

Police: Illinois man gouged uncle's eyes out

JOLIET, Ill. (AP) -- A northern Illinois man is accused of gouging his uncle's eyes out during a fight over a remote control.

Officials with the Will County Sheriff's Department say they were called to a Joliet Township home on New Year's Eve where a deputy found the 62-year-old victim with blood streaming from his eyes.

The (Joliet) Herald-News reports that authorities say the man's eyeballs were protruding from his eye sockets and that the victim told deputies his nephew tried to pry his eyes out with his thumbs.

The victim's 32-year-old nephew was arrested on a charge of aggravated domestic battery. A judge ordered him held on $1 million bond Tuesday.

Published: Thu, Jan 5, 2012

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