Shenandoah Life Sales Suspended
- Thread starter Joe Moore
- Start date
Joe:
With all due respect, what you should have written was... that Shen's mgmt is "some of the dumbest people in the ins biz".
Why... you ask. Anyone that would have approved that such a high percentage of their investment assets would have been invested into one security... let alone a company that was under such pressure and out of favor industry...
Here is the chart for the stock over the past year.... At what point should they have said "when"...? Maybe somewhere around June or July 08 would have been nice... or at least take another position to offset these losses that looked ominous to anyone with half an investment brain. I simply cannot cut them the slack that you are willing to... sorry, and I didn't lose a nickel in the company. But it is senseless; period.
Fannie's shares were around $60 in 2006 and 2007. They started dropping in October of 2007. The article Joe posted the link to says the money Shenandoah invested was in the first quarter of 2008. By then shares were trading for between $20-$30. I agree with your thoughts....poor investment. Maybe sticking the $50-60 million in a sock would have been better. Right now their shares are trading for a whopping .57 cents. Want to invest with them?
- 1,704
policy doctor:
Is your Avatar blowing his nose on his tie...? Sweet.
HAHA...actually, he is eating his tie out of frustration! But maybe a booger slipped out.
(that's the Georgian president phoning Bush during the Russian invasion last fall)
Had an 81 year-old that has 2 life policies w/Shen. with me, on herself, call me today. Said she just got her booklet in today. Once again, another policyholder that didn't understand what was going on. I told her about Freddie and Fannie. She didn't even know what I was referring to. She asked me if she should go ahead and pay for her funeral. She's not in good health. I told her the best thing to do was keep the 2 policies and I'll be in touch when I know more.
MEMO TO SCC: You seem to be confusing these folks(mostly elderly), with the booklet. They don't understand what's going on....even when you tell them in plain English.
MEMO TO SCC: You seem to be confusing these folks(mostly elderly), with the booklet. They don't understand what's going on....even when you tell them in plain English.
Fannie Mae Stock
Jan 2, 08 share price was 37.46
The avg share price in Jan 08 was appx 35 sh.
The avg share price in Feb 08 was appx 30 sh.
The avg share price in Mar 08 was appx 25 sh.
Mar 10, 08 share price hit the low for the qtr at 19.81
Two things... 1) the investment airwaves were filled wth info about deep and worsening RE problems... so why would one invest in FNM stock..? (to that magnatude)...? 2) Why would one sit by and see what was happening, declining share price of 33% during the 1st qtr of 08, and continue with the thumb inserted up their &%^$....?
The link below should take you to the chart for the first qtr... Chart to no-place (Whoops, the link doesn't save the dates of the 1st qtr, and only brings you to the past year of FNM stock chart) Sorry.
Again, the investment officer and the CFO, COO and CEO of this operation should be in jail... At the very least this may protect the rest of their families, if they discretion over the family investments... No sense in everyone being in the poor house...
What was the saying that ole Forrest Gump coined... "Stupid is as stupid does..."
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- Thread starter
- #216
- 307
The investments of Shenandoah were not in Common Stock. They were in (as we were told) AA-Rated Preferred Stock and it seems there are many lawsuits flying surrounding these offerings:
Entwistle & Cappucci LLP Announces Class Action Lawsuit Against Fannie Mae Senior Executives and Underwriters of Series T Preferred Offering
A Shareholder Of Fannie Mae Preferred Stock (Series T; NYSE: FNM-PT) Filed A Class Action Lawsuit - Free-Press-Release.com
Notice to Merrill Lynch Customers Who Purchased Fannie Mae Preferred Stock From the Securities Law Firm of Tramont Guerra & Nunez, PA | Market Wire | Find Articles at BNET
Patton Roberts, PLLC Files Class Action Lawsuit Against Fannie Mae On Behalf of Series S Preferred Stockholders -- FNM
From the last article is this information:
LITTLE ROCK, Ark., Oct. 27, 2008 (GLOBE NEWSWIRE) -- Patton Roberts, PLLC (www.pattonroberts.com), a national law firm with offices in Little Rock, Arkansas, Texarkana, Texas, and Shreveport, Louisiana announces that it filed, on October 8, 2008, a class action lawsuit against Fannie Mae (NYSE:FNM) on behalf of purchasers of Fannie Mae's 8.25% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series S who purchased the stock between December 11, 2007 and September 5, 2008, inclusive (the "Class Period"). Fannie Mae is the nation's largest source of financing for home mortgages. The action was filed in the United States District Court for Southern District of New York (08-CIV-8609).
In the complaint, plaintiffs allege that the defendants -- including several former officers and directors of Fannie Mae and the underwriters responsible for the Series S preferred stock offering -- knew or recklessly disregarded that Fannie Mae was grossly undercapitalized, in violation of Federal regulations, because of its overwhelming investments in subprime and Alt-A mortgages. These assets were not properly accounted for in violation of Generally Accepted Accounting Principles (GAAP). Fannie Mae's capital deficiency also was concealed because its deferred tax assets and guaranty obligations were not properly accounted for in violation of GAAP.
Since Fannie Mae was placed in conservatorship by the federal government, the price of its Series S preferred stock has declined precipitously from the $25 offering price and reached a low of $1.51/share -- roughly 94% less than its offered value -- on September 18, 2008.
I am not sure which "Series" of Preferred Stock Shenandoah was invested in, but anyone who bought these offerings was
evidently conned into believing there was a different picture of the company.
Shenandoah is not the only Insurance Company victim of what is looking more like a massive fraudulent picture of Fannie & Freddie, presented by Fannie & Freddie. Where was the SEC?
Old Mutual lost $135 million:
Insurance boss quits after $135m Fannie Mae and Freddie Mac losses | Business | guardian.co.uk
I cannot get the article to open, but here is how popular this Preferred Stock was with insurers:
EMC EXPECTS INVESTMENT LOSS RESULTING FROM FANNIE MAE, ... According to an A.M. Best report, the U.S. insurance industry's investments in securities issued by Fannie Mae ... U.S. insurers held about $4.0 billion in preferred stock and $265 million in common stock. ... Copyright (C) 2008 by A. M. Best Company, Inc. ...
There were so many insurers invested in these Quasi-Government entities, it appears this could be one of the numerous frauds we are beginning to recognize. I am not sure how anyone could have predicted when the government bailed them out, it would have the net effect of making Preferred Stock virtually worthless. Treasury set to bail out Fannie Mae, Freddie Mac - MarketWatch
However, damaging accounting scandals, questionable management, inadequate capital reserves and a crashing residential real estate market proved too much for even the Bush administration. During an election year in which the housing market meltdown has become a central issue, the market lost confidence in the government-sponsored mortgage entities and their financing costs rose to unsustainable levels. Republican and Democratic leaders alike began to call for Washington to take greater steps to safeguard the capital structure of the GSEs, for government-sponsored enterprises.
Although it was clear that these were not Government Insured Securities, these were government-sponsored enterprises.
If we are going to start putting people in jail who failed to recognize the fraud coming from these entities, and for buying this over-hyped crap, we might as well build a lot more jails.
I would much rather find who painted the picture that enticed insurers and many others to invest in these now virtually worthless securities.
If an insurance company, marketing company, or agent presented insurance products in the same fraudulent manner; the person or company would not be in this business once the authorities analyzed the situation.
Entwistle & Cappucci LLP Announces Class Action Lawsuit Against Fannie Mae Senior Executives and Underwriters of Series T Preferred Offering
A Shareholder Of Fannie Mae Preferred Stock (Series T; NYSE: FNM-PT) Filed A Class Action Lawsuit - Free-Press-Release.com
Notice to Merrill Lynch Customers Who Purchased Fannie Mae Preferred Stock From the Securities Law Firm of Tramont Guerra & Nunez, PA | Market Wire | Find Articles at BNET
Patton Roberts, PLLC Files Class Action Lawsuit Against Fannie Mae On Behalf of Series S Preferred Stockholders -- FNM
From the last article is this information:
LITTLE ROCK, Ark., Oct. 27, 2008 (GLOBE NEWSWIRE) -- Patton Roberts, PLLC (www.pattonroberts.com), a national law firm with offices in Little Rock, Arkansas, Texarkana, Texas, and Shreveport, Louisiana announces that it filed, on October 8, 2008, a class action lawsuit against Fannie Mae (NYSE:FNM) on behalf of purchasers of Fannie Mae's 8.25% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series S who purchased the stock between December 11, 2007 and September 5, 2008, inclusive (the "Class Period"). Fannie Mae is the nation's largest source of financing for home mortgages. The action was filed in the United States District Court for Southern District of New York (08-CIV-8609).
In the complaint, plaintiffs allege that the defendants -- including several former officers and directors of Fannie Mae and the underwriters responsible for the Series S preferred stock offering -- knew or recklessly disregarded that Fannie Mae was grossly undercapitalized, in violation of Federal regulations, because of its overwhelming investments in subprime and Alt-A mortgages. These assets were not properly accounted for in violation of Generally Accepted Accounting Principles (GAAP). Fannie Mae's capital deficiency also was concealed because its deferred tax assets and guaranty obligations were not properly accounted for in violation of GAAP.
Since Fannie Mae was placed in conservatorship by the federal government, the price of its Series S preferred stock has declined precipitously from the $25 offering price and reached a low of $1.51/share -- roughly 94% less than its offered value -- on September 18, 2008.
I am not sure which "Series" of Preferred Stock Shenandoah was invested in, but anyone who bought these offerings was
evidently conned into believing there was a different picture of the company.
Shenandoah is not the only Insurance Company victim of what is looking more like a massive fraudulent picture of Fannie & Freddie, presented by Fannie & Freddie. Where was the SEC?
Old Mutual lost $135 million:
Insurance boss quits after $135m Fannie Mae and Freddie Mac losses | Business | guardian.co.uk
I cannot get the article to open, but here is how popular this Preferred Stock was with insurers:
EMC EXPECTS INVESTMENT LOSS RESULTING FROM FANNIE MAE, ... According to an A.M. Best report, the U.S. insurance industry's investments in securities issued by Fannie Mae ... U.S. insurers held about $4.0 billion in preferred stock and $265 million in common stock. ... Copyright (C) 2008 by A. M. Best Company, Inc. ...
There were so many insurers invested in these Quasi-Government entities, it appears this could be one of the numerous frauds we are beginning to recognize. I am not sure how anyone could have predicted when the government bailed them out, it would have the net effect of making Preferred Stock virtually worthless. Treasury set to bail out Fannie Mae, Freddie Mac - MarketWatch
However, damaging accounting scandals, questionable management, inadequate capital reserves and a crashing residential real estate market proved too much for even the Bush administration. During an election year in which the housing market meltdown has become a central issue, the market lost confidence in the government-sponsored mortgage entities and their financing costs rose to unsustainable levels. Republican and Democratic leaders alike began to call for Washington to take greater steps to safeguard the capital structure of the GSEs, for government-sponsored enterprises.
Although it was clear that these were not Government Insured Securities, these were government-sponsored enterprises.
If we are going to start putting people in jail who failed to recognize the fraud coming from these entities, and for buying this over-hyped crap, we might as well build a lot more jails.
I would much rather find who painted the picture that enticed insurers and many others to invest in these now virtually worthless securities.
If an insurance company, marketing company, or agent presented insurance products in the same fraudulent manner; the person or company would not be in this business once the authorities analyzed the situation.
Agents are advised to...not write for just one company....spread it around, just in case. Looks like Shenandoah should have taken that advice. In the end, they get screwed, the companies in receivership and policyholders don't know what to think. I'll stand by my comments....poor investing. Putting all of your eggs in one basket and losing + losing your reputation as an insurance company.
There's also the apparently smaller loss with Sigma Finance...which wound up in receivership....Sigma Finance Website Currently Unavailable
Just a bad situation and rough times in the insurance industry.
Joe...I hope you get access to your money again. Sorry, I would then have to put it in something safer...like a sock. At least I would always have access to it.
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Got this off of Shenandoah's website this morning...
March 18, 2009
LEGAL NOTICE
Re: Unauthorized Use of StarNet Log-On IDs and Passwords; Unauthorized Use of Shenandoah Life Insurance Company Property
Shenandoah makes StarNet available to specified persons solely for use in furtherance of Shenandoah's insurance business. All StarNet users are reminded that StarNet, StarNet log-on information and passwords, as well as all Shenandoah policyholder lists, forms, policies, manuals, sales materials, client information, product information, proposal capabilities, records and similar materials and information are the sole and exclusive property of Shenandoah, the use of which is only permitted solely to the individual whose use Shenandoah has expressly authorized and solely for the purposes authorized (on this point, please refer to your contract).
Shenandoah reserves the right to limit, revoke or deny any person's access to StarNet, at will at any time, at Shenandoah's sole discretion. Any unauthorized use of StarNet is strictly prohibited and will subject the unauthorized user, any person who facilitated such unauthorized use, and any person who benefited at Shenandoah's expense from such unauthorized use, to potential legal action. As stated in the February 19, 2009, Notice to Agents and Marketing Organizations: AGENTS WHO ACT CONTRARY TO THE INTERESTS OF SHENANDOAH MAY FORFEIT THEIR RIGHT TO RECEIVE COMMISSIONS AND MAY ALSO BE REQUIRED TO REPAY COMMISSIONS RECEIVED WHILE THEY WERE ACTING CONTRARY TO SHENANDOAH'S INTERESTS. IN ADDITION, ANY PERSON INTERFERING WITH THE RECEIVERSHIP MAY FACE CLAIMS BY THE DEPUTY RECEIVER FOR ANY RESULTING DAMAGES SUSTAINED BY SHENANDOAH. StarNet users should govern themselves accordingly. If any person has solicited your StarNet log-on ID and/or password, please report such activity to Shenandoah immediately, and if you have given your StarNet log-on ID and/or password to any other person, you should change your password immediately.
There's also the apparently smaller loss with Sigma Finance...which wound up in receivership....Sigma Finance Website Currently Unavailable
Just a bad situation and rough times in the insurance industry.
Joe...I hope you get access to your money again. Sorry, I would then have to put it in something safer...like a sock. At least I would always have access to it.
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Got this off of Shenandoah's website this morning...
March 18, 2009
LEGAL NOTICE
Re: Unauthorized Use of StarNet Log-On IDs and Passwords; Unauthorized Use of Shenandoah Life Insurance Company Property
Shenandoah makes StarNet available to specified persons solely for use in furtherance of Shenandoah's insurance business. All StarNet users are reminded that StarNet, StarNet log-on information and passwords, as well as all Shenandoah policyholder lists, forms, policies, manuals, sales materials, client information, product information, proposal capabilities, records and similar materials and information are the sole and exclusive property of Shenandoah, the use of which is only permitted solely to the individual whose use Shenandoah has expressly authorized and solely for the purposes authorized (on this point, please refer to your contract).
Shenandoah reserves the right to limit, revoke or deny any person's access to StarNet, at will at any time, at Shenandoah's sole discretion. Any unauthorized use of StarNet is strictly prohibited and will subject the unauthorized user, any person who facilitated such unauthorized use, and any person who benefited at Shenandoah's expense from such unauthorized use, to potential legal action. As stated in the February 19, 2009, Notice to Agents and Marketing Organizations: AGENTS WHO ACT CONTRARY TO THE INTERESTS OF SHENANDOAH MAY FORFEIT THEIR RIGHT TO RECEIVE COMMISSIONS AND MAY ALSO BE REQUIRED TO REPAY COMMISSIONS RECEIVED WHILE THEY WERE ACTING CONTRARY TO SHENANDOAH'S INTERESTS. IN ADDITION, ANY PERSON INTERFERING WITH THE RECEIVERSHIP MAY FACE CLAIMS BY THE DEPUTY RECEIVER FOR ANY RESULTING DAMAGES SUSTAINED BY SHENANDOAH. StarNet users should govern themselves accordingly. If any person has solicited your StarNet log-on ID and/or password, please report such activity to Shenandoah immediately, and if you have given your StarNet log-on ID and/or password to any other person, you should change your password immediately.
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- Thread starter
- #218
- 307
Thanks Russ.
My concern at the present time is not really about myself. My family and I have all got policies and retirement plans with them; all but one do not exceed the guaranty limits.
I am truly glad they re-thought, and started paying commissions immediately. The natives would have become very restless by now.
I feel virtually any life insurance policy should be safe. The concern with this I would have now is large annuities (and there are some). Most states only cover them to $100,000 State Guarantee Funds
Hopefully it will never come to activating this back-up.
Joe
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A scary situation:
The Next Big Disaster Will Be Insurance Stocks | Jutia Group
Insurance Companies (all but AIG) have basically been ignored about their potential problems. With state protection already in place, it may be that having problems early could be a blessing for Shenandoah.
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Found this article, dated March 10th, 2009 What happens when a life insurer fails? on clarkhoward.com google searching Shenandoah Life. Clark Howard has a show on Headline News(aka HLN). Talks about Shenandoah Life and also says....
"Unfortunately, with state guarantee associations, policyholders are often left waiting and wondering if and when they'll get their money back. There often isn't even a clear-cut timeline about the process, according to Clark.".....
Which is exactly what I tell folks. If Shenandoah goes under and the state guarantee assoc. takes over, it could be months before you get your money.
Joe Moore...I read the link you provided about the problems insurance companies will soon face. Interesting article.
One thing that this forum needs correcting...when you make a post and then make another one shortly thereafter, it merges the posts and other readers are unaware that someone has posted again unless you read the thread again.
"Unfortunately, with state guarantee associations, policyholders are often left waiting and wondering if and when they'll get their money back. There often isn't even a clear-cut timeline about the process, according to Clark.".....
Which is exactly what I tell folks. If Shenandoah goes under and the state guarantee assoc. takes over, it could be months before you get your money.
Joe Moore...I read the link you provided about the problems insurance companies will soon face. Interesting article.
One thing that this forum needs correcting...when you make a post and then make another one shortly thereafter, it merges the posts and other readers are unaware that someone has posted again unless you read the thread again.
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I'm glad I only have a small amount of business with them. But have already started getting calls. The fact that most states only cover up to $100,000 on state guarantee funds is what scares me. Had a client call last night he and his wife each have a $500,000 term plan. He told me point blank I want to switch. I would do the same thing if I was in his shoes. Others have small FE plans and now have health issues I told them you should stay put. Figure I should look at things from a case by cases basis and do right by the client.
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