by Structured Settlement Watchdog
A video for Ash Brokerage illuminates one way peddlers of structured settlement payment rights to investors in the structured settlement secondary market take advantage of the lack of regulation is misrepresenting structured settlement payment rights as annuities. Ash Brokerage, the sponsor of Let’s Get Down to Business, a show featuring Steve Savant, syndicated financial columnist and talk show host, tries to do the right thing, at least according to an admission made by a "retail adviser" interviewed in a video posted to the Ash Brokerage YouTube channel June 3, 2014.
Here are the a few unedited excerpts of the transcript of Annuity Straight Talk's Bryan Anderson's interview (Note: transcript typos left in)
1. GOOD Admits that "secondary market annuity" IS NOT technically an annuity.
secondary newtie is it really a min knew it it's not technically an annuity as
everybody knows an annuity* " (emphasis added)
*that's because it is not an annuity! So why call it an annuity?
Then, it all goes horribly wrong
2. BAD Bryan Anderson of Annuity Straight Talk completely misrepresents the financial ratings of John Hancock, MetLife, Allstate and Prudential in the video
companies like met life
New York Life John Hancock allstate prudential the biggest names in the
and so we're not talking about a-minus purses B-plus carriers 100 talking about
AAA rated paper here":
3. BAD again ANOTHER misrepresentation by Bryan Anderson as to MetLife
"and we're not talking about it being carrier again we're talking about
something like met life for New York Life
and in comparison to what those companies would offer a triple A rated
company" (emphasis added)
Neither MetLife, nor Prudential, nor Allstate, nor John Hancock is "AAA rated". New York Life is not rated AAA by Standard & Poors.
Perhaps someone employed at those companies holds membership in the American Automobile Association (also AAA), but that's about it.
4. BAD Bryan Anderson misrepresents and misinforms at 2:49 that "the losing party in that lawsuit never is relieved if a liability to make those payments" when in fact a qualified assignment relieves them of that obligation and the assignee is substituted as obligor. Furthermore, when there is settlement there is no "losing party" because a settlement is a compromise. Here is how a structured settlement is actually created. The name "paying party" is more accurate. A paying party could be a Defendant, or the insurer(s) for a Defendant, or both.
The subject video contains a marketing misrepresentation that is unfortunately typical of what one can observe in the under-regulated world of the sale of investments in structured settlement payment rights. Bryan Anderson represents in the video that he is a "retail (financial )adviser" and uses words such as "due diligence". According to Investopedia due diligence is "an investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to a sale. Aren't financial ratings of the issuers of the underlying paper to the recycled structured settlements material facts?
Who was doing the due diligence on that advertisement ?
Insurance and securities regulators should watch the video and investigate how recycled structured settlement payment rights are being sold. At this time last year I demonstrated how Plymouth Massachusetts company SHP Financial misrepresented recycled structured settlements as "Just like a CD". Others tout guaranty fund protection that may not exist for the asset class.
Observations current as of February 23, 2015 at 2:00pm
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