Firm Ordered to Stop Sale of Pension-Linked Investments

Feb 1

Texas Securities Commissioner John Morgan on Feb. 1 entered an Emergency Cease and Desist Order against a firm selling investments that supposedly earn returns from the payout of pension benefits it acquires from federal government employees, members of the military, and certain corporations.

The order requires Andrew Gamber of Jonesboro, Ark., and the company he incorporated, Jackson, Miss.-based SoBell Corp., to cease and desist from selling the investments. SoBell is selling its “Pension Income Stream Program” in Texas.

The Texas cease and desist order cites SoBell and Gamber’s failure to disclose sanctions imposed from 2013-2014 by state securities regulators in Arkansas, Pennsylvania, California, and New Mexico.

Those four states levied multiple cease and desist orders against Gamber, Voyager Financial Group LLC, and persons who sold the pension-based income investment. The orders cited violations of state law for selling unregistered securities, misleading investors about the riskiness of the company’s investment products, including the default rates relating to the sale of pension income streams by companies controlled by Gamber, and not disclosing the fact that assigning pension payments violates federal law.

According to the Texas order, SoBell executes agreements with the recipients of pension benefits. The agreements give SoBell the authority to sell the income from the pensions to investors.

The starting purchase price for an investor is $35,000 and can exceed $1 million. SoBell claims to earn investors an annual return of 7% to 8%, depending the length of the payment term.

SoBell and Gamber are selling unregistered securities, engaging in fraud by failing to disclose their history of sanctions, and making other statements to investors that are misleading and deceiving, according to the Texas order.

So-called steam-of-income investments, similar to the ones Gamber is selling, are one of the Top 10 Investor Threats cited by the Texas State Securities Board. These investments involve a company acting as a middleman for buyers and sellers. Companies introduce investors to individuals who may want to sell income based on pension payments or government disability payments.

Laws may prohibit the assignment of the stream of income/benefits. The seller typically maintains the legal right to redirect the payment, and if the seller does redirect the payment, the investor may be left with an unenforceable contract right. Persons who sell their benefits are often veterans and disabled persons. These individuals may be solicited when they are in financial distress, selling much needed future benefit payments at a significant reduction.