08.12.25
Fractional Life Insurance Policies Considered an Investment Contract
by: Matthew Sellers
The Ninth Circuit Court of Appeals ruled that fractional interests in life insurance policies are securities, boosting compliance requirements for advisors. Pacific West Capital Group (PWCG) sold shares in policies, promising investors doubled returns via its expertise and reserve system. The model collapsed when insureds lived longer than projected, depleting reserves and causing losses. The Securities and Exchange Commission sued PWCG, founder Andrew Calhoun IV and several sales agents. The court found profits depended on PWCG’s management, making the products investment contracts.
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