SEC Issues Investor Warning after Seinfeld Defrauds Terminally Ill

Jay Daniel Seinfeld used a fake charity to defraud terminally ill patients out of their money. Let that one sink in for a minute.

The SEC has settled charges with Seinfeld, his firm Traditions Capital Management and his fake charity, the Hospice Patient Aid Program.

The SEC charged Seinfeld and a social worker for their roles in a fraud scheme to exploit terminally ill investors and profit from their deaths.

Yeah, this is a thing.

The SEC even had to warn investors on the same day to be cautious about “Charitable” investments because of this guy.

Seinfeld hired a social worker in Texas and founded this charity to get access to hospices and terminally ill patients throughout Texas. Then, over a period of three years, they got more than a dozen people to hand over their personal information and sign transaction documents as purchasers of corporate bonds that would payout upon their deaths.

Then, they simultaneously relinquished most of the bonds’ anticipated proceeds. Seinfeld will accept a 3-year officer-and-director bar and to pay $412,750 in disgorgement and prejudgment interest and a $256,287 penalty. Postma will accept a 2-year officer-and-director bar and to pay $93,750 in disgorgement and prejudgment interest and a $50,000 penalty. These settlements will still require court approval.

Details of Charges Against Jay Daniel Seinfeld

Jacqueline Sergeant over at FA-Mag offered a detailed breakdown of the scheme.

She explained that Seinfeld and Postma operated the HPAP program in two stages.

In the first part, Postma visited patients, discuss charitable aid, and then secure “executed forms that included HIPAA releases.”

These are the same documents designed to secure patients’ medical information.

Then, Seinfeld followed up with the patients. He would use the HIPAA releases to find out all about patients medical history and talk to a doctor. He was trying to find out how soon the patient was going to die.

Whoosh. The SEC says that Seinfeld’s original medical records requests were misleading as well. He said those records were necessary “to assure [those] qualifying patients are able to receive financial assistance from our program in a timely fashion.”

The SEC said that he was also running background and credit checks on the terminally ill patients.