SEC Charges 2 Companies in 'Green" Ponzi Scheme

by L.A.S.

In November the SEC charged four persons and two companies in a so-called 'green' Ponzi scheme. It targeted elderly investors or those nearing retirement to finance a supposedly green housing community that would use biochar charcoal substitute made from organic waste.

The SEC alleges that the "green" representations were bogus, and investors were falsely promised enormous returns ranging from 17% to "hundreds of percent" annually. In fact, the company's environmental initiatives did generate any significant cash, and any returns paid to investors have been funded almost exclusively from other investors' contributions, the SEC says.

Charged in the complaint were Mantria Corp., Speed of Wealth LLC, Wayde and Donna McKelvy, and Troy Wragg and Amanda Knorr in federal court in Denver. Mantria's only source of revenue has been from its resale of vacant lots for its purported residential communities in rural Tennessee, but those did not generate cash with which to pay investor returns because Mantria provided 100% financing for almost all of its vacant lot sales to buyers using other investors' funds.

Ohio broker barred after stealing sisters' inheritance

Richard Wood, an agent in Miamisburg, Ohio who was with American General Securities Inc., promised to invest two sisters' money but used the funds for himself.
The sisters were beneficiaries of an aunt who had been a client of Wood. Wood provided both sisters with a false account number for a fake brokerage account. He was eventually found out, and forced to repay one of the sisters. The firm repaid the other sister.
The Financial Industry Regulatory Authority (FINRA) barred Wood in an agreement in which Wood did not have to admit or deny the allegations.
Lucky for the sisters, they have their money back.

Have You Looked into Indexed Universal Life Yet? It Offers Safety and Good Returns

by L.A.S.

Many Boomers, discouraged by their investment returns after the debacles of the 1990s and 2008, have checked into the indexed universal life insurance.

Boomers, stung by hard losses in previous stock market downturns, have found one likely candidate for safe investing. Indexed universal life insurance offers the investor the ability to lock in gains during the good years, and protection of your account during the bad years.

Indexed universal life offers a zero percent floor, meaning you will not lose your principal even if the market goes bad. This provides preservation of capital. The only drawback is the the investor has fewer investment options than with other forms of variable universal life, but for many of us, simpler is better. Owners of these policies can sleep better at night, too.

More than 50 percent of the sales of this product are to Boomers. They trade off not receiving dividends for their participation in the plan.

Other types of investment vehicles that have seen increased sales are fixed annuities and multiyear-guarantee (aka CD-type annuities).

Insurance carriers have guidelines regarding the suitability of annuities for a client. The parameters include: age 40 or more, has considered alternative investments, is appropriate for the client, has funds to sit in this account for an extended period, has sufficient liquidity so that he or she will not have to dip into their annuity for the foreseeable future, and maintains at least 20 percent of their net worth for immediate needs and emergency funds.

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