On January 3, 2012, the SEC filed a civil complaint against Life Partners Holdings, Inc. and three senior executives for their involvement in a fraudulent disclosure accounting scheme. According to the complaint, the parties failed to disclose that the company was systematically and materially underestimating the life expectancy estimates it used to price transactions. As a result of this, the SEC alleges, "Defendants materially misstated net income from at least financial year 2007 though the third quarter of fiscal year 2011."

On January 3, 2012, the SEC announced that it charged Life Partners Holdings Inc and three of its executives for their involvement in a fraudulent disclosure and accounting scheme involving life settlements. According to the complaint, the defendants used improper accounting "to overvalue assets held in the company's books and create the appearance of a steady stream of earnings from brokering life settlement transactions."

On January 4, 2012, the SEC issued a litigation release announcing that it charged Life Partners Holdings, Inc. and three of its senior executives for "their involvement in a fraudulent disclosure and accounting scheme involving life settlements."

On December 2, 2014, Judge James R. Nowlin entered a Final Judgment Order as to defendant Life Partners Holdings, Inc., Brian Pardo, and R. Scott Peden. Previously, a jury had returned a verdict against the defendants.