September 28, 2011 / 12:52 AM / 7 years ago

Federal agents raid Imperial Holdings' Florida offices

(Reuters) - Federal investigators on Tuesday raided the Florida offices of Imperial Holdings Inc IFT.N, a company that makes lump-sum payments on legal settlements and life insurance policies, the FBI said.

Imperial Holdings confirmed the raid and said it, along with certain employees, including its chairman and chief executive and its president and chief operating officer, were under investigation for matters related to the company’s life-insurance business.

No actions had been taken against its structured-settlements business, the company said in a statement.

“Today’s action comes as a complete surprise. We are not aware of any wrongdoing and will cooperate fully,” Chairman and CEO Antony Mitchell said in the statement.

The company said it would hold a board meeting later on Tuesday and it expected all of its businesses to resume normal operations on Wednesday.

Shares of Imperial were halted for pending news at 1:42 p.m. ET and did not trade the rest of the day. The stock last changed hands at $6.32, down 2.8 percent.

Imperial Holdings became a publicly traded company in February when it raised $179.2 million in an initial public offering. The stock has lost 41 percent of its value since then.

Its largest shareholder, with a 9.5 percent stake according to Thomson Reuters data, is Pine Trading Ltd, a Bahamas-registered entity that only holds Imperial shares.

According to Imperial’s annual report, Pine Trading is controlled by David Haring, who also controls other entities in partnership with Chairman and CEO Mitchell.

Insiders have recently been buying the company’s shares, according to U.S. Securities and Exchange Commission filings.

Director Robert Rosenberg bought 1,000 shares in August, and Chief Financial Officer Rory O’Connell bought 7,500 shares then as well. O’Connell did not own any shares before that purchase, the filing showed.

Imperial lost money every year from 2008 through 2010, but was profitable in the first six months of this year, according to its posted financial statements.

Local media were first to report the raid.

The Palm Beach Post reported that FBI agents appeared to be gathering evidence inside the company’s offices, and pictures on its website showed agents leaving the building.

The South Florida Business Journal said an agent leaving the building said he was working for the U.S. Treasury.

The FBI and the company said in statements that the investigation is being run out of New Hampshire.

The U.S. Attorney’s Office in New Hampshire declined to comment, while a spokeswoman for the Florida attorney general’s office could not immediately comment.

Underwriters on Imperial’s IPO were led by FBR Capital Markets. FBR did not return calls for comment.

Reporting by Clare Baldwin and Ben Berkowitz; Editing by Ted Kerr, Gunna Dickson, Phil Berlowitz, Bernard Orr and Vinu Pilakkott

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