Charges spawn from a complex bond pricing scheme

Michael Hild, founder and CEO of Live Well Financial, faces charges for running a $140 million bond scheme.

The U.S. Attorney’s Office for the Southern District of New York charged him with securities fraud, mail fraud, and bank fraud. The government says that the scheme involved the inflation of complex reverse-mortgage bonds. The scheme allegedly ended when Live Well shut down in May.

“Through this alleged scheme – which Hild called a ‘self-generating money machine’ – Live Well was able to borrow tens of millions of dollars more from its lenders through the securities transactions than it could have borrowed had the bonds been priced accurately and was able to fund lavish compensation packages for Hild and others,” the SEC stated.

Michael Hild Denies Charges

Hild has dismissed the charges.

He released a statement Thursday saying that he was “deeply disappointed that the government has chosen to respond to the business failure of Live Well Financial by alleging corporate fraud.”

Two other executives – CFO Eric Rohr and Executive President Darren Stumberger – also received charges from the federal government. The government arrested neither.

The SEC also charged a civil case against the three executives.

The Collapse of Live Well

Hild once worked as an executive at Capital One. He launched the company Live Well in April 2005. At one point, the firm had up to 300 employees. The company never specifically addressed its 2019 collapse. However, it did issue a statement to the state of Colorado about its financial conditions.

“The company requires significant liquidity to operate its business of originating, securitizing and servicing forward and reverse mortgage loans,” it stated in its letter. “Due to sudden and unexpected developments in the markets for certain financial assets the company uses as collateral or certain credit facilities that provide this liquidity, these lenders have reduced significantly the amount of liquidity they make available to the company.”