(p41) - A Seabolt. Mr. Mike Seabolt.
5 Q Okay.
6 A But you know this was a good deal.
7 MR. PEIFFER: And when he said this, what
8 did he mean by this?
9 THE WITNESS: Mel's whole plan. He was
10 taking over now for Mel. Because Mel used to be
11 big dog. Mel's gone. They fired her supposedly.
12 So I talked to Mr. Funny Name.
13 BY MR. RIKARD:
14 Q Maschek?
15 A Yeah, Maschek. So I told him. I got
16 belligerent with him. He said we've fired Mel and
17 this company has tried to sue us and we are suing them
18 back because they said that we were involved and we're
19 suing Mel; we didn't know anything about this; this
20 has nothing to do with insurance, Debbie; you know, if
21 you try to do anything to us, you know, we're big,
22 blah, blah, blah, blah, blah.
23 I said you know you knew everything because
24 it's an open room; you would come in there when we
25 were all talking; you were patting me on the back;
(p43) - 1 Q So Mr. Maschek was trying to say that
2 Shurwest didn't know about the IRA Reboot program?
3 A Oh, yeah.
4 Q But while you were out there --
5 A Big-time liar.
6 Q -- getting explained to it earlier on, you
7 met him; correct?
8 A He's patting everybody. He's -- oh, every
9 time I ever was there, he was right in the middle.
10 And when I came in March with all those guys that she
11 was selling on that, he comes in the room. They bring
12 in food for lunch and then they take you to the
13 fancy -- and he's in there and he's shaking -- he's
14 says, oh, Debbie, you're doing such a wonderful job;
15 isn't Mel just wonderful and she's treating you good
16 and you're such a great agent and blah, blah, blah.
17 Q And just so I'm clear, as Mel is explaining
18 the IRA Reboot program at Shurwest's offices,
19 Mr. Maschek is in the room?
20 A Well, he could come in and out.
21 Q Right.
22 A He wasn't always, but yeah
(p44) - MR. PEIFFER: Do you think it's possible
6 that anyone that had a serious position at
7 Shurwest, I mean, somebody who was an owner of
8 Shurwest or was high up there -- do you think it
9 was possible that they could have been ignorant
10 of the fact that this was --
11 THE WITNESS: No, because --
Doc. 151-21 - Ed Storer Deposition
(p26) - 3 And we had this case, as I explained earlier,
4 where we needed to do it prior to age 59 1/2 through a
5 72t, which is a code in the tax law, and we asked their
6 recommendation. And this was the recommendation that
7 was given to me from Shurwest and Mel.
(p51) - Q. Right.
16 And you did understand at the time, did you
17 not, that FIP was not an insurance product?
18 A. We were under the impression, being that it
19 was offered through Shurwest --
20 Q. Okay.
21 A. -- Shurwest is an IMO -- through Mel
22 Schulze-Miller, that this was an insurance product.
23 Q. Okay.
24 A. That's -- that's it. I mean, how can Shurwest
25 offer anything else?
(p54) - 1 A. Whether it's a new company or I've never heard
2 of it is irrelevant because there are so many products
3 and names out there that companies come up with products
4 that we rely on the IMO and FMO to share with us what
5 they are.
(p56) - Q. What is your understanding of your due
19 diligence that should be done before you offer a product
20 to a customer?
21 A. Could you -- I'm sorry. Due diligence. Help
22 me understand.
(p59) - But, again, relying on Shurwest, Mel
22 Schulze-Miller, the relationship that was built there,
23 how and could and why would a reputable FMO or IMO do
24 that?
(p61) - 1 Q. Were you aware that in 2016, Massachusetts
2 entered into a cease-and-desist order with FIP?
3 A. I was not aware at that time.
4 Q. And then in 2016, the state of North Carolina
5 did the same.
6 A. Again, I was not aware at that time.
7 Q. And then in '16, New York; December of '16,
8 Washington; February of '17, City of Los Angeles; May of
9 '17, Commonwealth of Pennsylvania; August of '17, state
10 of Minnesota; January of '18, Oregon; February of '18,
11 Illinois; and March of '18, Virginia.
12 A. Are you asking me do I know that?
13 Q. Did you know that before you sold
14 Ms. Burgess --
15 A. I did not know that.
16 Q. Had you seen any one of those, you would not
17 have sold this to her, correct?
18 A. Had I seen any of that -- I would not be here
19 right now if it was not for Shurwest and them offering
20 the product.
21 Q. Then
(p61-62) - 23 Q. That's okay.
24 And you didn't know that Mr. Kohn had been
25 indicted and pled guilty to three felonies in 2006.
Page 62
1 A. I don't even -- until everything that has
2 happened, I had no idea who a Mr. Kohn is.
3 Q. But again, the only research you did was
4 relying on Shurwest.
5 A. For an insurance product. That is what we
6 have to rely on.
7 Q. So -- but you were also an IA at the time,
8 right?
9 A. Correct.
10 Q. And you agree you have a fiduciary obligation
11 to your clients. Is that right?
12 MR. MATHIAS: Object to the form.
13 THE WITNESS: I'm a fiduciary. I'm not a
14 lawyer.
(p65) - Q. And she indicated she had a conservative risk
10 tolerance. Is that right?
11 A. Correct.
12 Q. And would you say FIP was a conservative
13 product?
14 A. It was under the umbrellas of
15 conservativeness. Yes.
16 Q. And what qualified it for that?
17 A. Simply because it was -- again, we were under
18 the impression it was an insurance product. Insurance
19 products are inherently safe.
(p71-73) - A. And I show -- make sure the dates are there,
18 the initials are there where it needs to be done, and
19 sign the appropriate places.
20 Again, I thought this was an insurance
21 product, and insurance products are standard contracts,
22 and I don't --
23 Q. Well, I'm happy for you to sit there in that
24 eight pages and tell me which part of it refers to it as
25 an insurance product if you want to do that.
Page 72
1 A. I'm not saying this does. I'm telling you
2 that that's what I do.
3 Q. Okay.
4 So my question, though, is, did you actually
5 read this non-qualified purchase agreement before you
6 had Ms. Burgess sign it?
7 A. No. I did not read the contract before I had
8 Ms. Burgess to sign it. I skimmed where it needs to be
9 signed. There are standard contracts in the industry.
10 The insurance contracts are standard. I don't read all
11 standard contracts that come from insurance companies
12 because they're the standard insurance contract.
13 Q. And in a standard insurance contract, doesn't
14 it, like, have the name of the insurance company at the
15 top of the contract?
16 A. There are multiple insurance companies with
17 multiple names, and they have multiple names for
18 products, so I just never looked at it as anything
19 different than the standard operating contract.
20 Q. And does purchase agreement infer to you that
21 this is an insurance contract?
22 A. It doesn't infer to me that it doesn't -- it's
23 not an insurance contract.
24 Q. Okay.
25 But again, you didn't -- you said -- you just 1 testified, I think, that you didn't even read this
2 before you had Ms. Burgess sign it.
3 A. I did not read through it thoroughly to do it.
4 What I do is I read through where it needs to be
5 initialed, what needs to be signed.
6 Q. Have you ever read it?
7 A. I've read it now.
8 Q. Okay.
9 And do you understand it to not be an
10 insurance contract?
11 A. I understand it now.
Doc 87 - Declaration of Lee Squitieri in Support of Motion for Class Certification - 22p
6. Attached hereto as Exhibits 5(a)-(j) are true and correct copies of regulatory actions by the States of Colorado, Washington, Pennsylvania, California, Massachusetts, North Carolina, New York, Iowa, Indiana and Minnesota. (arranged chronologically) barring sales of FIP Products in the respective States and sanctioning FIP for violations of applicable laws, rules and regulations of the respective States. - <Not Available - Sealed>
12. Attached hereto as Exhibit 11 is a true and correct copy of the transcript of the deposition of Securian 30 (b)(6) witness Seth Detert. - <Not Available - Sealed>
17. Attached hereto as Exhibit 16 is a true and correct copy of an FIP contract. - 12p
18. Attached hereto as Exhibit 17 is a true and correct copy of Detert Exhibit 6 “FIP -Linked Policies” (ML1485-1490.) - <Not Available - Sealed>
19. Attached hereto as Exhibit 18 is a true and correct copy of Detert Exhibit 5 “IRA Reboot” email (ML 0002292-93). - <Not Available - Sealed>
20. Attached hereto as Exhibit 19 are true and correct copies of emails discussing structured cash flows. (ML 1601-1603). - <Not Available - Sealed>
23. Attached hereto as Exhibit 22 is a true and correct copy of the January 8, 2016, United States Consumer Finance Protection Board’s injunction order against FIP describing the illegal structured cash flow product sold to Plaintiffs and class members as a premium financing device to pay the premiums to MLIC and SLIC on policies sold to Plaintiffs and class members. - 13p
26. Attached hereto as Exhibit 25 is a true and correct copy of Wade Allen deposition. - <Not Available - Sealed>
27. Attached hereto as Exhibit 26 is a true and correct copy of materials describing the March 2017 presentation by speakers including Securian [title] Wade Allen on “Premium financing” (ML 2330-2335;2316-2327;2935-36;2517-2520;2503-
204). - <Not Available - Sealed>
28. Attached hereto as Exhibit 27 is a true and correct copy of documents discussing FIP among defendants’ personnel. (ML 2301-2302; 2305-2306;2308-2313). - <Not Available - Sealed>
29. Attached hereto as Exhibit 28 is a true and correct copy of a published report reporting that as many as 370 financial advisors may have sold FIP products to buyers of Securian insurance products. August 23, 2018, Investment News.
30. Attached hereto as Exhibit 29 is a true and correct copy of the Indexed Universal Life insurance policy plaintiff Ciofoletti purchased from Defendants and which was issued by MLIC. (ML 0000001-0000055) - <Not Available - Sealed>
31. Attached hereto as Exhibit 30 is a true and correct copy of the correspondence between the Ciofoletti’s and Securian offering rescission and no release of claims. - 2p
32. Attached hereto as Exhibit 31 is a true and correct copy of the Indexed Universal Life insurance policy plaintiff Stospal purchased from Defendants. ML 344-385). - <Not Available - Sealed>
33. Attached hereto as Exhibit 32 is a true and complete copy of the agreement between Stospal and Future Income Products Inc. (“FIP”) for Stospal’s purchase of FIP Products (as that term is defined in the SAC). - 15p
34. Attached hereto as Exhibit 33 is a true and correct copy of Stospal’s correspondence with Securian accepting rescission offers but not releasing any claims. - 3p
Doc 256 - Order denying 195 Motion to Certify Class. (Written Opinion) Signed by Judge Joan N. Ericksen - 11p
Doc 138 - Transcript - June 23, 2020
p14-15 - These are very, very good policies. They're expensive. They provide a lot of protection.
They have good income generating prospects, but they are not cheap, and that is why the FIP product came into play because what it did was, in our words, cheated these insureds out of their pension accounts, out of their pension payments, so that that could be used to pay for premiums that they're, let's say, operating earnings and income would not allow.
p17 - .... the broker who often collects one hundred percent of the first year premiums and some even more. I think one of the applications that we have in the exhibit list shows 105 percent of first year applications.
Wexler - p25 - because what the principal is saying there is that use the Shurwest's agents because you're not going to know, understand this product without them.
So it's creating, I mean there's a severe imbalance of knowledge about this very complicated product, so the paragraphs that I've given you, and I'm happy to do it again, show MN Life was encouraging people to use their agents.
And Shurwest was bringing agents in, flying them in, wining and dining them to explain how the product worked.
p26 - There isn't an agent whose deposition transcript we attached who doesn't say everybody knew what was going on.
Everybody knew what we were doing.
p27 - And sure enough, you know, Civ Jig 30.30, which talks about the scope of an agent's authority, talks about implied authority to act and be determined by the course or pattern of dealing between a principal and agent.
p27 - How can we decide today that Melanie Schulze-Miller and a couple of others were simply rogue agents?
We can't do that. I think we put on materials that show the opposite.
p27 - It's Vacura v. Haar's Equipment, Inc. It's cited in the notes to this Jury Instruction, 364 N.W.2d 387 at 391, Minnesota Supreme Court 1985. And the Court says, well, apparent authority is usually based on some affirmative action on the part of the principal.
Authority may be found when the agent has regularly exercised some power not expressly given to it and the principal knowing of the practice tacitly sanctions its continuance.