Cape couple to recoup more than $83,000 from insurance settlement

More than $83,500 taken from an elderly Cape Girardeau couple has been recovered, Secretary of State Jason Kander announced Wednesday.

The settlement comes from previous action taken by Kander's office against an insurance agent in Cape Girardeau, according to a news release from his office.

The consent order stated the couple had expressed concern over their ability to afford premium payments on insurance policies, but Harry Ward and Manzur Mazumder, former agents of Bankers Life and Casualty Co., convinced the couple to set up a brokerage account at ProEquities Inc. Then Ward would use "an investment strategy in covered calls to generate enough income to cover the premium payments on the policies," Kander's office said.

The order alleged ProEquities failed to reasonably supervise Ward, who sold universal insurance policies issued by Bankers Life to the Cape Girardeau couple. Kander's office said the call strategy he used with the couple's ProEquities brokerage account was "unsuitable," and trades made in the account resulted in losses and failed to generate the income necessary to pay the policy premiums.

ProEquities agreed to pay $83,528 in restitution and interest to the couple, in addition to $40,000 in fines and $5,000 to cover the costs of the investigation. It also has reviewed its policies, procedures and controls, provided additional training to agents on options trading, enhanced annual compliance training to protect elderly clients and improved monitoring of the sale of covered calls such as those used by Ward, all as a result of the investigation.

In May, Kander's office reached a settlement with Bankers Life for more than $57,000 after taking action against Mazumder. Bankers Life agreed to pay $57,178 in restitution to two Missouri seniors, $40,000 in fines and $5,000 to cover the cost of the investigation, according to information from the Kander's office.

That order alleged Mazumder and another agent, Harry Ward, convinced the couple to establish a brokerage account at ProEquities and let Ward manage and trade securities on their behalf to finance premium payments on life insurance policies despite their concerns about affordability.

Kander issued a cease-and-desist order for Mazumder in November 2013 after he allegedly lost more than $241,000 belonging to a Jackson woman in a fraudulent investment scheme. He allegedly persuaded the woman to let him set up trading accounts in her name and make investments with money from her retirement accounts, credit cards, a home-equity line of credit and a bank account, according to the order.

No criminal charges were filed in that case.

The secretary of state asks anyone considering making an investment decision to first consult his office at 1-800-721-7996 or MissouriSafeSavings.com.

"Before investing your hard-earned savings, make sure you understand the costs and penalties on transactions made in your account," Kander said in the news release. "If an investment or an investment strategy sounds too good to be true, then it probably is."

Pertinent address:

Cape Girardeau, Mo.