Life Settlement Sales Agents Must Pay Investor Losses, SEC Fines

Three former sales agents at a Los Angeles firm are on the hook to repay hundreds of thousands in ill-gotten gains after a federal appeals court found they sold unregistered securities and failed to register as broker-dealers.

The agents at Pacific West Capital Group sold fractional interests in life settlements—transactions in which life insurance holders sell their policies to investors for a negotiated price.

Those fractional interests qualify as investment contracts under securities statutes because purchasers expected to profit from PWCG’s promotional activities, a three-judge panel from the US Court of Appeals for the Ninth Circuit ruled Monday.

“These investments ...