A PLETHORA OF SLAPP LAWSUITS
Strategic Lawsuits Against Public Participation (SLAPPs) are lawsuits brought against those who communicate with their government or speak out on issues of public interest. SLAPP filers don't go to court seeking justice. Rather, SLAPPs are intended to intimidate those who disagree with them or their activities by draining the target's financial resources. SLAPPs are effective because even a meritless lawsuit can take years and many thousands of dollars to defend. Following is a summary of the years I struggled to preserve my First Amendment rights against plaintiffs with massive war chests.
The First SLAPP Lawsuit: Life Partners Inc .
In
1997 my first book about the viatical settlement industry was released to the
public. It was intended to advise terminally ill people about the abuse and
fraud that could victimize them, when they sold their life insurance. Aware
that many concepts were new to most readers, and most readers were suffering
serious, disabling illness, I intentionally cut compound sentences to single
ideas.
One chapter was written
differently--as a story. It was entitled, "Brian Pardo: Grateful for AIDS." The
title referred to the founder and CEO of Life Partners, Inc. of
The previous business, a solar
utility company, was charged in 1989 by the SEC with financial fraud. The case
settled out of court, with Pardo promising he would never again violate
securities laws. Three years later Pardo's new viatical company, Life Partners
Inc. (LPI) was thriving, he was living in a mansion in
In
1992 Pardo and LPI were issued cease and desist orders by North Dakota
Securities Commissioner Glenn Pomeroy for an investment scheme that violated
state securities law and disclosure requirements.
There are thirty-nine references in the end notes to that chapter. Among the references was a 1996 article published in the magazine, POZ. "Let the Seller Beware" described Pardo as "one of the industry's blackest sheep." It also summarized the then-new SEC lawsuit against Pardo and his new company, LPI. "The Securities and Exchange Commission (SEC) has sued Pardo and his company for a raft of securities-law violations. The SEC claimed that Life Partners sold interests in policies it had viaticated as though they were unregistered securities, misled viators and investors (it claims to be the largest viatical settlement company but isn't), and didn't disclose Pardo's previous run-ins with the securities and banking laws."
The same title was used by the
Washington Blade, which described and named AIDS patients who sold policies to
LPI, and concluded these were "shady business dealings."
Pardo
is one SLAPP-happy entrepreneur. He sued the
Although each of Pardo's SLAPP suits against regulators was dismissed--eventually--the tactic worked. It consumed substantial time and resources. It sent out a warning to others. The result: Years passed before any government entity had the courage to tackle Pardo and LPI. SLAPP lawsuits enabled Pardo and LPI to operate above the law.
Now, at long last, Pardo and LPI are, again, pestered
by an SEC investigation. They are further encumbered by numerous civil lawsuits
in courts around the nation, some filed as class actions. The stock price has
plummeted. The Wall Street Journal enjoys chronicling these activities.
During the silent years, the years in which LPI's SLAPP suits and deep
pockets earned them immunity, I continued to warn the public--terminally ill
people and investors. I have several file boxes of documents from victims of Life
Partners. My first book did not merit retaliation but when my second book,
"Viatical Settlements: An Investor's Guide," was published in 1998, I became a
target of Life Partners. Once that ended, their cohorts resumed the battle to
silence me.
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