Agency: U. S. Securities & Exchange Commission
On April 7, 2015, the U.S. Securities and Exchange Commission ("SEC") charged Pacific West Capital Group, Inc. ("PWCG") and its owner, Andrew B. Calhoun IV ("Calhoun") with violating provisions of the Securities and Exchange Act. The SEC's Complaint charges PWCG and Calhoun with violating the antifraud, securities registration, and broker-dealer registration provisions of the federal securities laws. The SEC's Complaint alleges that since 2004, PWCG and Calhoun raised nearly $100 million from life settlement investors. Since at least 2012, PWCG and Calhoun are alleged to have defrauded investors by using proceeds from the sale of new life settlements to continue funding life settlement investments sold years earlier. The Complaint alleges that PWCG and Calhoun did not disclose this practice to investors and undertook it to make life settlement investments appear successful when in fact, PWCG had used up the primary reserves to pay premiums on those policies. According to the Complaint, PWCG and Calhoun also made false and misleading statements about the risks of investing in life settlements, including the risk of investors have to make increased premium payments as insured individuals lived longer than PWCG and Calhoun anticipated. Further, the Complaint alleges that PWCG and Calhoun misled investors about annual returns and to have falsely represented to investors that their investments had nothing to do with PWCG's efforts and fortunes.
The SEC Complaint also named Ohio-based PWCG Trust, and five sales agents of Pacific West, Brenda C. Barry, her company BAK West, Inc., Andrew B. Calhoun Jr., Eric C. Cannon and his company Century Point, LLC and Michael W. Dotta and Caleb A. Moody as Defendants. The SEC seeks permanent injunctions against PWCG, Calhoun, and all Defendants and the return of allegedly ill-gotten gains with interest and penalties from PWCG, Calhoun and the sales agents. This is currently a pending matter with the United Sates District Court Central District of California.
Date of Action: 4/17/2015