Morbid as it may sound to bet on the quick demise of people in order to collect from their sold insurance policies, some viatical investors may find the settlement with Mutual Benefit Corp. a killer. The Charlotte (Fla.) Sun-Herald reports that the Securities and Exchange Commission is winding down its two-year effort to recover millions that the firm’s top executives were charged with siphoning off. But after the lawyers involved get their cut, according to the Sun-Herald, a number of investors who bought the policies may end with as little as $5, while others may pay more in processing fees than their actual settlement was worth. Investors received three options – to keep their investments and continue paying the premium; to let the receiver sell their investments at auction; or to abandon their investments. The auction appeared to be the most profitable for some, as they are expected to get back up to half of their investments. While this case hasn’t helped the Mutual Benefits investors much, according to the paper, the SEC’s involvement resulted in court cases that clarified that viatical investments are securities.
