Who is Vetting the Originators of Structured Settlement Derivatives Settlement Planners Are Selling To Lawyers and Their Clients?

by Structured Settlement Watchdog

Certain settlement planners  have been advocating and continue to advocate placing the funds of injured plaintiffs, including minors, and their lawyers into structured settlement derivatives. Structured settlement derivatives are structured settlement payment rights acquired in the structured settlement secondary market. The figurative cat that has been out of the bag for at least 7 years now.

Is there a conflict of interest?

During the structured settlement transfer process one person wins and another person loses money, lots of money.  The money loser is the structured settlement seller, the annuitant, the very same sort of person that the settlement planner may have professed plaintiff loyalty to in advertising to trial lawyer associations and to clients of the member lawyers. The structured settlement annuitant always loses in a structured settlement factoring transaction. The question is "how much?". When I have spoken with some of the settlement planners who play both sides of the fence on the down low,  they postulate that there is no conflict of interest because they are not originating the structured settlement derivatives. Some claim to only facilitate a deal from originators or from one of several firms that make a tertiary market in structured settlement derivatives. "

What are settlement planners independently doing to vet the companies that originate the structured settlement derivatives?

It's not unlike the ethics of buying furs from companies that source from clubbers of fur seals, or clothes from sweatshops involving children

The level of questionable conduct from originators of structured settlement factoring transactions has been at unprecedented levels for the last 5 years

1. The alleged Access Funding et al. scam of Baltimore lead paint structured settlement annuitants subject to 3 different law suits
2. The criminal conduct involving a lawyer for multiple originators who forged the signatures of 7 Broward County judges on over 100 legal documents that led to a conviction
3. The criminal conduct of a paralegal of a  New York City personal injury firm that represented multiple originators
4. The solicitation of a New York City high school senior by a now defunct factoring company who paid for his bus ticket to Virginia to conclude a structured settlement factoring deal
5. The activities detailed in the deposition of Andrew Hoffman by lawyers for Client First Funding.
6. The targeting of young African Americans by Novation Funding in ugly deals, like Cedric Thomas who was fleeced by Novation for well over a million dollars.  Which investors profited from that bogus deal?
   
7. Terrence Taylor case threatens to affect structured settlement derivative investors.
   
8. The fraudulent marketing and business conduct of Ryan Blank and Richart Ruddie companies like Annuity Sold and JRR Funding, that led to a large fine and a 7 year Maryland ban in a deal with the Maryland Attorney General.
   
9. A year after putting his client into a large structure, a Houston personal injury attorney, using an offshore company set up only months after the structure was established, attempts to financially savage his own client with a 22% discount rate and attempts to lay it off to others in the secondary market.

These examples of bad business conduct by structured settlement originators demonstrate possible reputation and financial risk factors for the settlement planners and the lawyers who refer them to their clients that may not have been disclosed or even considered.

Example #1 Multiple investors have lost money when payments were suspended due to competing claims

Example #4 is an example of a very bad structured settlement factoring deal for the seller that was placed in the tertiary market for the benefit of another plaintiff, through a currently active settlement planner, who used the services of an intermediary who suspended sales of structured settlement derivatives in the fallout from the Access Funding in business, who in turn did business with an small originator who is no longer in business.

Consider the Irony

• Some of those who make such claim pushed hard for life insurers to include special language in settlement agreements and qualified assignment "to allow people to factor". Now they're exploiting it.
  
• One settlement planning firm which also does a large amount of tertiary market business also advertises that it has an irrevocable trust to prevent annuitants from factoring.

"Fiduciary Duty"

If a settlement planner is truly acting as a fiduciary (as some hold themselves out to be) then won't he or she, possibly in direct conflict with the planner's marketing to trial lawyers, have to get his/her instant client the best rate, even if that meant some other annuitant was savaged.  One could argue that the fiduciary settlement adviser cannot put the interest of another plaintiff above that of his or her own plaintiff client or a lawyer using structured settlement derivatives. One dubious defense I've heard, is that the seller of the structured settlement payment rights is no longer a plaintiff and the adviser is not an originator and is steps removed from the origination of the cash flow. Is that good enough?

Some of the worst actors in the structured settlement secondary market do not have the access to institutional capital markets that the big boys do.  So they go for alternative financing from private investors via some of the same sources that settlement planners go to for structured settlement derivatives (scam labeled secondary market annuities, SMIAS or SMAs). For example court records show that Uber Funding, associated with fraudster Richart Ruddie and one of the companies recently banned from doing business in Maryland for 7 years, has assigned at least one case to Oregon's  SMA Hub  (Hub Business Trust)