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Did Former ProEquities, Inc. Financial Advisor Todd Phillips Recommend Unsuitable Investments in Future Income Payments, LLC?

Posted on Thursday, October 25th, 2018 at 10:39 am    

Future Income Payments

Erez Law is currently investigating former ProEquities, Inc. financial advisor Todd Phillips (CRD# 2948119) regarding recommendations to invest in Future Income Payments, LLC (FIP LLC) and related investments and insurance policies funded by FIP distributions. According to public records, a former client of Phillips filed a FINRA arbitration against Phillips’ former employer ProEquities, Inc. for losses sustained from investments in the fraudulent Future Income Payments investment.

Phillips has been registered with Bankers Life Securities, Inc. in Jacksonville, Florida since May 2016. Previously, he was registered with Proequities, Inc. in Jacksonville, Florida from 2012 to May 2016.

The FIPs were formerly known as Pensions, Annuities & Settlements, LLC. FIPs are investments that are primarily sold as a growth and income investment tool by insurance agents or independent marketing organizations. FIPs are used to supplement income, grow assets, and fund other insurance products. FIPs are structured cash flow products related to pensions, where the investor pays a lump sum in exchange for the right to collect the collect that person’s pension and sometimes disability plans or benefit programs on their behalf. The seller would forward the pension payments to FIP, and then FIP would forward to the investor minus any fees owed to FIP.

If the person lives long enough, the investor can see a profit. However for many investors, the person whom they purchased the pension/disability plan does not live long enough to receive a profit. In many instances, the pensioner continues to collect benefits as well as the upfront lump sum and makes claims that the agreement with the investor was invalid. FIP LLC already collected the fees, and the investor doesn’t see those recurring payments.

It is alleged that FIP LCC issued loans without a license and disguised the loans as sales agreements. It is believed that most investors will lose their entire investment. FIP has been subject to regulatory action in California, Colorado, Indiana, Iowa, Massachusetts, New York, North Carolina, Pennsylvania, Virginia, and Washington.

In 2016, the State of New York ordered FIP LLC to cease operations and pay back any interest charged to customers, plus a $500,000 penalty. It is alleged that FIP operated illegally and charged customers up to 130% interest.

The New York Department of Financial Services said FIP LLC lent out $2.3 million to pensioners with the expectation it would be repaid $8.8 million.

In March 2015, FIP LLC a cease and desist order against FIP LLC, Pensions, Annuities & Settlements, LLC, Cash Flow Investment Partners, LLC and manager Scott A. Kohn. The order cited the following description taken from the website, “Cash Flow Investment Partners, LLC is one of the nation’s leaders in selling pension plans and structured early retirement buyouts that will meet your immediate needs and long term goals, and to fund you very quickly. Now you do not have to wait for your cash anymore. You can easily borrow against your pension and get cash for your annuity.” The order states that beginning in 2012, Kohn and the companies that he managed “engaged in the business of a finance lender or broker, in California, by entering into written contracts with California consumers to provide a lump sum of money in exchange for the consumers’ pension or retirement benefits.”

Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, ProEquities, Inc. may be liable for investment or other losses suffered by Phillips’ customers.

In May 2014, the State of Washington entered a cease-and-desist order against FIP, alleging that the company conducted business in at least 98 transactions without a valid license to do so.

It is alleged that brokerage firms across the country, including Foresters Equity Services, Inc. and NYLife Securities, LLC, recommended their clients invest in Future Income Payments, LLC.

Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If and have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.