The US Securities and Exchange Commission is suing some Texan retirement planners for playing fast and loose with the process of calculating investors' resources, among other things.

The SEC alleges that the retirement planning firm, Novers Financial, used a bogus 'net worth calculator' that improperly qualified some prospective investors for purchases by including income that investors had not yet received, such as future pension benefits. It has also charged the firm and its principals with falsely telling customers that interests in life settlements they offered and sold were “guaranteed,” “safe as CDs,” and “federally insured.”

Interests in life settlements are investments based on potential payouts on insurance policies held by others.  Typically they can only be sold to investors who meet certain income or net worth levels.  The SEC alleges that, to get around those limits, Novinger and Speers provided prospective investors with a net worth calculator that factored in future income to artificially inflate client assets.  For example, according to the SEC complaint, one couple’s non-homestead assets falsely “ballooned” from $263,000 to nearly $1.5 million when the calculator improperly included 20 years’ worth of Social Security and retirement payments the couple anticipates receiving in the future.

The SEC also charged ICAN Investment Group LLC and Speers Financial Group LLC for acting as unregistered broker-dealers.  It is seeking injunctive relief, the return of allegedly ill-gotten gains with interest, and financial penalties.