Scott Silver Weighs In On New Lighthouse Offerings

Silver Law Group managing partner Scott Silver has weighed in on the newest “life bond” securities offerings by Lighthouse Life Capital, LLC. Despite previously suffering considerable losses, the company is now raising capital for a new $50 million bond offering, which includes higher amounts of investor interest and broker commissions.

Scott’s experience with GWG Holdings’ L-Bonds in FINRA arbitration cases gives him a unique perspective on this newest edition of “life settlement” investments, including the commissions involved. The three broker-dealers chosen for these offerings have themselves been involved in prior FINRA arbitrations.

“Ten percent is a substantial commission, higher than we generally see in practice for sales by a broker-dealer,” Mr. Silver said. “As they are selling this in $10,000 increments, they are most likely targeting a high-net-worth retail audience.”

Would investors be put off by the three broker-dealers handling these Lighthouse investments, considering the SEC and FINRA disciplinary actions they settled? “They will never know. Investors don’t do due diligence on these firms,” Scott said.

When asked about how this newest Lighthouse bond investment will play out, Mr. Silver stated, “They will be profitable if they can consistently make more than they are paying in commissions and interest. In light of the very high rate of return, Lighthouse has either found the magic bean that pays an incredibly high rate of return or this is an exceptionally risky investment.”

The Broker-Dealers

Lighthouse is offering these investments through three chosen broker-dealers:

• Patrick Capital, based in St. Louis, MO
• Great Point Capital LLC, based in Chicago
• Crescent Securities Group Inc., based in Plano, TX

These three companies have all paid penalties for settled misconduct cases, according to their FINRA CRD reports.

Life Settlements

Lighthouse is a company that offers policyholders cash for life insurance policies they no longer need, want, or can afford. A policyholder may have purchased a policy in anticipation of a future event, such as passing away at an old age. But if the policyholder’s situation changes, that life insurance policy may no longer serve its anticipated need, leading the person to seek a way out of the policy.

Surrendering the policy to the company usually only gives the policyholder a small percentage of the policy’s total value. Selling the policy offers a policyholder the market value of the policy as well as needed cash, which can be as much as four times the surrender value, according to Lighthouse’s website.

The company is offering $50 million in “beacon bonds” to investors for a minimum investment of $10,000, with the offering lasting one year.

Did You Invest With Lighthouse Life Capital LLC? 

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