An investigation for investors in shares of Life Partners Holdings, Inc. (NASDAQ:LPHI) over potential violations of Federal Securities Laws by Life Partners Holdings announced.

The investigation by a law firm concerns whether Life Partners Holdings, Inc. violated Federal Securities Laws and whether certain officers and directors at Life Partners Holdings, Inc. breached of fiduciary duties.
Shares of LPHI rose shortly after Life Partners Holdings reported on October 26, 2010 its quarterly dividend from $17.95 per share on Oct. 20 to as high as $22.96 on December 08.
Waco, Texas based Life Partners Holdings, Inc., through its subsidiary Life Partners, Inc., is engaged in the secondary market for life insurance known generally as life settlements. Life settlement transactions involve the sale of an existing life insurance policy to another party. The purchasers acquire the life insurance policies at a discount to their face value for investment purposes. The purchaser takes an ownership interest in the policy at a discount to its face value and receives the death benefit under the policy when the insured dies. But if the insured individual's death comes later than estimated, the payout is delayed and investors must continue paying premiums, reducing their eventual returns.
Then on Dec. 21 the Wall Street Journal published an article stating, among other things, that Life Partners, a fast-growing company in Waco, Texas, has made large fees from its life-insurance transactions while often significantly underestimating the life expectancies of people whose policies its customers invest in
The Wall Street Journal said that Life expectancies are a key factor in the business of investing in strangers' life insurance. If estimates are too low, investors face a double whammy: Their policy payout is delayed, and they must keep paying premiums as the person lives on. The Wall Street Journal said its investigation found that at Life Partners [..] the result is that 10% or 15% yearly returns promoted to investors may prove elusive for many. And that Attractive projected returns for clients are part of the company's formula for success. Life Partners Holdings 12months Total Revenue went over the past four filing periods from $29.8million to $113million. Its Net Income went from $3.36million to $29.43million over the same period.
But the Wall Street Journal said that Life Partners' filings with the Texas Department of Insurance [] show that in policies old enough to provide a measure, the insured people usually haven't died within the life expectancy Life Partners gave its clients, and often were still living beyond double or triple their projected span.
The Wall Street Journal said that In 2002 []Life Partners brokered investments in 297 life policies. [] But in 95% of these policies, the insured was still alive at the end of the life expectancy the company supplied to investors...

Then on January 20, 2011 Life Partners confirmed that the U.S. Securities and Exchange Commission is conducting an investigation into the business of its operating subsidiary, Life Partners, Inc.
Shares of Life Partners Holdings, Inc. (Public, NASDAQ:LPHI) have dropped nearly 56 percent since Life Partners Holding, Inc. confirmed the SEC investigation and The Wall Street Journal article. LPHI shares decreased from as high as $18.37 per share in the beginning of December 2010 to recently $10.32 per share.