2013 0704 - LC - Cressy vs FG Life, OM Financial, Doug Andrew, Paramount - Complaint for Damages and Equitable Relief - 39p
- 2013 0704 - LC - Cressy vs FG Life, OM Financial, Doug Andrew, Paramount - Complaint for Damages and Equitable Relief - 39p --- [BonkNote]
- [Bonk] - 16 - 270p - Complete
- (p1) - 1. Unlawful, Unfair and Fraudulent Business 17200 et seg.);
- 2. Unfair, Deceptive, and Misleading Advertising (Cal. Bus. & Prof. Code et seg.);
- 3. Breach of Fiduciary Duty;
- 4. Fraud
- Plaintiff Demands Trial by Jury
- (p6) - 17. There is no question that a characterization of life insurance as an investment is a misrepresentation and an unfair and deceptive trade practice.
- OM Financial/FG Life's own Market Conduct Guide provides that use of terms such as "investment," "investment plan," or "savings plan," when used to describe the features, conditions or benefits of a life insurance policy "...has the tendency to mislead a purchaser...." Also, according to the company's Market Conduct Guide, the policies and procedures in it "...encompass regulatory requirements and best practices governing sales and marketing material, most notably NAIC Model Advertising Rules adopted by most states ...." To that end, all states insurance regulations (including California's) prohibit misrepresentation and omissions in the sale of life insurance. 780, 709, et seq. and 10 CCR
- (p10) - b. Missed Fortune Marketing and Sales Tools
- (p16) - 40. The Missed Fortune Software created and provided by Andrew and Paramount Financial, and. approved by OM Financial/FG Life, was used to generate the "reports" for the "Strategic Design."
- The Strategic Design reports are deceptive primarily because they misrepresent OM Financial/FG Life's equity indexed universal life insurance as an investment, and moreover, as a suitable investment if funded with home equity funds.
- It also uniformly generated deceptive illustrations of investment performance that were unrealistic and based on inflated "investment yields.
- (p18) - 46. The uniform and deceptive message delivered through. the Missed Fortune marketing materials and each step of the True Wealth transformation process was two-fold.
- First, and consistent with their TEAM training, the Missed Fortune Producers falsely touted themselves and Douglas Andrew as expert financial advisors and highly trained investment professionals, working for the clients' best interests when in fact they were operating for the sole purpose of selling life insurance. Secondly, that by following the Missed Fortune Producers' expert advice and purchasing the policies in question the clients would obtain safe, liquid, "investment grade" policies using home equity funds and other capital that would create greater wealth and security than other investments, when in fact the life insurance policies were not appropriate investment vehicles.
- (p19) - The Conspiracy
- 47. OM Financial/FG Life, Andrew and Paramount Financial conspired together and with others to perpetrate the fraudulent Missed Fortune scheme.
- (p21) - The Uniform Misrepresentations, Half-Truths, and Omissions Defendants-Made To Plaintiff and Each Member of the Putative Class
- These misrepresentations all conveyed exactly the same message to Plaintiff and members of the putative -class: that the OM Financial/FG Life equity indexed universal life policies were, safe, effectively liquid investments and would increase financial security.
- Missed Fortune Producers, Paramount Financial, Andrew, and OM Financial/FG Life withheld material facts including that the policies were worth less than represented, and fundamentally inferior to other investments. Missed Fortune Producers, Paramount Financial, Andrew, and OM Financial/FG Life falsely represented that by investing their money in the policies, Plaintiff and putative class members would "optimize" their assets.
- (p24) - Causation
- No rational member of the putative class would have purchased the policies in question but for Defendants' misrepresentations and omissions.
- The only logical explanation for Plaintiff and each class members' conduct is that they relied upon Defendants' misrepresentations and omissions.
- (p24-25) - Proposed Class Representative Mr. Cressy's Transactions
- In his experience, Mr. Cressy dealt with Missed Fortune Producers named Michael Voogd and Kenneth Ogan, Jr.
- Both had received TEAM Training from Andrew and Paramount Financial, and both were appointed producers of OM Financial / FG Life.
- 58. Around November 2006, Mr. Cressy read an advertisement for a seminar to be put on by Ogan Financial and Capital Line Financial claiming to help people achieve greater wealth with tax-free retirement plans. This advertisement was published in a newspaper by Mr. Voogd and Mr. Ogan, as Missed Fortune Producers and OM Financial/FG Life appointed agents. At the seminar attended by Mr. Cressy, Mr. Voogd and Mr, Ogan urged Mr. Cressy and the other attendees to "harvest" their home equity and invest it in an "Equity Indexed Universal Life" insurance policy, thereby achieving more wealth than with IRA's, 401(K)'s, Mutual Funds, Stocks; Bonds and Real Estate. This would be achieved by utilizing his home's equity, the purported tax savings Mr. Cressy would realize by maintaining a high mortgage balance, the purported tax- deferred treatment of the Life insurance accumulation value, and "borrowing" from his life insurance cash value in his later years, as a retirement strategy. It was represented to Mr. Cressy by Mr. Voogd that the life insurance policy was a safe,. liquid, and suitable investment that would earn a good rate of return.
- Additionally, Mr. Cressy was provided with Missed Fortune marketing materials which provided the same false message as was provided to all other members of the putative class, that being that OM Financial/FG Life Equity indexed universal life policies were investments.
- 59. Soon thereafter, Mr. Cressy had a meeting with Mr. Michael Voogd of Ogan Financial.
- (p31-32) - 82. OM Financial/FG Life, Paramount Financial, and Andrew's, as well as their agents', acts of unfair competition and unlawful business practices include violations of the Civil RICO statute, California Civil Code §§1572, 1573, 1709, 1711, 1770, California Insurance Code §§ 330, 331, 332, other portions of the California Insurance Code and related regulations and rules, including 10 CCR §.?547.4, and the common law. Such acts include, but are not limited to,
- a. misrepresenting the life insurance policies as investments;
- b. selling Plaintiff and members of the public equity-indexed universal life insurance policies that were unsuitable for their investment, estate planning, insurance, and/or financial needs;
- c. misrepresenting and inflating the returns and results Plaintiffs and members of the putative class could achieve by purchasing equity-indexed universal H& insurance policies;
- d. misrepresenting to Plaintiff and members of the public that OM Financial/FG Life equity-indexed universal life insurance policies are "investment grade";
- e. misrepresenting to the Plaintiff and members of the public that OM Financial/FG Life equity-indexed universal life insurance policies were comparable to investments such as securities, 401(k) plans, and other investments
- f. misrepresenting Plaintiff and members of the public that withdrawing 100% of one's home equity and investing the proceeds in an policy was "safe"; and/or
- g. failing to adequately disclose the true nature of equity-indexed universal life insurance policies.
- (p33) - SECOND CAUSE OF ACTION - UNFAIR, DECEPTIVE AND MISLEADING ADVERSTISING (Cal. Bus. & ProL § 17500, et seq.)
- (p35) - THIRD CAUSE OF ACTION - BREACH OF FIDUCIARY DUTIES
- (p34) - FOURTH CAUSE OF ACTION - FRAUD
- (p37-38) - REQUEST FOR JUDGMENT
- Plaintiff asks for judgment against Defendants and each of them, in its and the putative class's favor as follows:
- 1. For an order certifying this action as a class action;
- 2. For actual and compensatory damages in such amount as the Court or jury deems just and proper;
- 3. For attorney's fees and costs for all causes of action alleged herein for which such amounts are permissible under applicable law, including California Code of Civil Procedure§ 1021.5, in such amount as the Court or jury deems just and proper;
- 4. For prejudgment interest;
- 5. For an order,requiring Defendants to provide notice to the ~lass and to pay for such notice;
- 6. For imposition of a constructive trust, recessionary relief, injunctive relief, including prohibition of Defendants' unfair, illegal and fraudulent business practices set forth herein, and including restitution and disgorgement of ill-gotten profits; and
- 7. All other relief which the Court and/or jury deems equitable and just.
- (p38) - DEMAND FOR JURY TRIAL
- Plaintiff on his own behalf and on behalf of the putative class, demands a jury trial in the above captioned matter.