In the wake of an SEC-FINRA Investor Alert about investments in pension streams, the Senate Labor and Pensions Committee began an inquiry focused on these investments and possible fraud. In a letter to the National Association of Attorneys General, Chairman Tom Harkin (D-Iowa) and Ranking Member Lamar Alexander R-TN) said that there may not be full disclosure around the practice of purchasing pension revenue streams. For example, while some of these arrangements come with very high fees, there is no clarity on whether these fees are fully disclosed.
There may also be requirements linking the
purchase of pension revenue streams with the purchase of other financial
products. More broadly, the Senators are concerned that innocent investors who
purchase the rights to the pensions on a belief that they are worthy and legal
investments are being misled or even defrauded by the brokers of these
The letter is designed to elicit information on
which companies are offering these investments and where the companies are
incorporated, as well as details on how these arrangements are structured. The
Senators also want information on whether and how many enforcement actions have
been brought in this area.