The SEC wants viatical companies to make full disclosure, including financial statements on both the company and its owners and investment risks associated with viaticals. Washington D.C.-based Gannon is an attorney who is active in the agency's lawsuits against viatical companies. Laing, owner of Personal Choice Opportunities, pled guilty to fraud. A class action lawsuit was filed in Florida against three viatical companies. In this case, the companies misled investors regarding life expectancies, failing to inform them about protease inhibitors, medications that have extended the lives of AIDS patients.
Some plaintiffs await settlement payouts that are several years late.
There are also reports of healthy people applying for life insurance at the urging of viatical companies. It also contends that wet ink policies end up as a wagering contract that will simply stimulate insurance frauds. They lie about their medical history and sell the new policy immediately. In some states, the securities regulator takes the lead in overseeing viaticals, while in others it's the insurance department. It's this lack of uniform control that makes it easy for viatical companies to slip through jurisdictional cracks.