Reuters: Regulatory News: UPDATE 1-Imperial Holdings settles with DOJ, shares soar

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UPDATE 1-Imperial Holdings settles with DOJ, shares soar Apr 30th 2012, 14:06 Mon Apr 30, 2012 10:06am EDT April 30 (Reuters) - Specialty finance company Imperial Holdings Inc admitted to making misrepresentations to elderly people on life insurance premium financing and said it would pay $8 million as part of a settlement with the U.S. Department of Justice to avoid prosecution. Federal investigators raided Imperial's Florida offices last September and put certain employees -- including its chairman and chief executive, and its president and chief operating officer -- under investigation for matters related to the company's life insurance business. The company, which makes lump-sum payments on legal settlements and life insurance policies, said President and Chief Operating Officer Jonathan Neuman had resigned and that it was exiting the insurance premium finance business. Imperial said that under the settlement terms with the U.S. Attorney's office for the District of New Hampshire, it was not likely to be prosecuted for any potential securities fraud claims related to its insurance premium finance business. Imperial also acknowledged that it failed to take appropriate precautions to prevent other misrepresentations that may have been made on life insurance policies by employees, prospective insured and external agents, and brokers. The company is still under investigation by the U.S. Securities and Exchange Commission regarding possible violations of federal securities laws. Shares of the company, which plunged as much as 75 percent a day after investigators raided its offices, were up 35 percent at $3.99 in early trading on the New York Stock Exchange. Imperial Holdings, currently valued at about $63 million, went public in February 2011 after raising $172.2 million. Link this Share this Digg this Email Reprints

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