by Structured Settlement Watchdog
Kerry Pechter, the editor and publisher of Retirement Income Journal, published an article in September 14, 2017 entitled "On the Case: Income from a ‘Certified’ Used Annuity". Pechter appeared to be humping for a tertiary market company. The National Association of Insurance Commissioners has opined IS NOT an annuity [ see draft Statutory Issue Paper No. 160 December 2018, finalized April 6, 2019]
Retirement Income Journal Was Irresponsible and Misled Its Readers about Investing in SMAs
'SMAs, if you’re new to them, are the “used” contracts referenced in our headline' wrote Pechter. These are income streams or lump sum payouts that were originally awarded to individuals as monetary awards in wrongful injury suits. The recipients of these annuities have the option of keeping them or selling them to investors for lump sums.
Part of the problem with some financial writers and editors is that they don't do their research. Pechter belly flops because:
An SMA is not an annuity. SMA is a scam label for structured settlement receivables (factored structured settlement payment streams).
- A factored structured structured settlement payments stream is not a used contract. It is a transfer of structured settlement payment rights. It is a receivable In a structured settlement factoring transaction it is not the annuity that is sold.
- A structured settlement is not an award. A structured settlement is not awarded. That's why it's called a settlement.
- The investor in a factored structured settlement payments stream is not buying an annuity. Original annuitants cannot sell the annuity that funds their structured settlement because they do not own the annuity.
- There are characteristics of an annuity that DO NOT exist with factored structured settlement payment stream.
- Factored structured settlement payments streams have more risk than buying an annuity. Kerry Pechter failed to recognize, the threat to investors in factored structured settlement payment streams as evident in Wall v Corona Capital (known in Feb 2017, before Pechter published), the 150+ investors waiting for payments that may never arrive from investments in scam labeled " SMA" (known in Feb 2017 before Pechter published)
Before Pechter writes any more articles about SMAs he should speak with Barry Cooper who at the time of posting had an open FINRA complaint against a tertiary market company from Oregon. Cooper's claim against one party alleges breach of fiduciary duty, negligence, negligent supervision, common law misrepresentation, breach of contract and unauthorized trading. Transaction at issue occurred in 2013, and involved a Factored Structured Settlement "FSS" payment stream through an approved Outside Business Activity "OBA" and seeks $150,000.00 in damages. The FINRA claim was subsequently settled a monetary penalty was levied according to public disclosure available on the FINRA website for the reps involved.