Life Partners Announces Receipt of Wells Notice

Life Partners Holdings LPHI announced today that it has received an amended Wells Notice from the Securities and Exchange Commission. As previously disclosed, on May 9, 2011, the Company received a “Wells Notice” from the SEC stating that the Staff will recommend that the SEC bring a civil injunctive action against the Company and two of its directors and executive officers, Brian D. Pardo and R. Scott Peden, for possible violations of Section 17(a) of the Securities Act of 1933, Sections 10(b) and 13(a) of the Securities Exchange Act of 1934, and certain rules thereunder. On June 3, 2011, the Company received an amended Wells Notice expanding the scope of the recommendation for civil action. The expanded Wells Notice states that the Staff will recommend that the SEC bring a civil injunctive action against the Company and three of its directors and executive officers, Brian D. Pardo, R. Scott Peden and David M. Martin, for possible violations of Section 17(a) of the Securities Act of 1933, Sections 10(b) 13(a), 13(b)(2)(A) and (B) of the Securities Exchange Act of 1934, and certain rules thereunder. The Company understood that the initial Wells Notice related primarily to its knowledge of and disclosures about the accuracy of the estimates of the life expectancies of settlors. The Company understands that the expanded Wells Notice also includes allegations about the disclosures regarding and the propriety of certain accounting policies and practices, including revenue recognition, the impairment of life settlements held by the Company for investment, and the stated policy for premium advances the Company might make on certain client policies.