CIHC, Inc., Conseco Services, LLC and Conseco Equity Sales, Inc.

On August 9, 2004, the SEC instituted settled administrative and cease-and-desist proceedings against respondents CIHC, Inc., Conseco Services, LLC, and Conseco Equity Sales, Inc., subsidiaries of insurance company Conseco, Inc.  The SEC’s Order found that respondents allowed rapid in-and-out trading, known as market timing, through Conseco variable annuities contrary to the information in the prospectuses for the variable annuities.  As part of the settlement, CIHC, Inc., Conseco Services, LLC and Conseco Equity Sales, Inc. agreed to pay $15 million, including disgorgement of $7.5 million and civil penalties of $7.5 million.  For more information on the SEC’s action, you can read In the Matter of CIHC, Inc., Conseco Services, LLC and Conseco Equity Sales, Inc., 33-8455 (Aug. 9, 2004).

Under the terms of the SEC's Order, an Independent Distribution Consultant must submit to the SEC a distribution plan for the distribution of the Fair Fund containing $15 million to investors.  According to the Commission's Rules of Practice, notice of the proposed Distribution Plan must be published for at least 30 days, specifying how copies of the proposed Distribution Plan may be obtained, and describing the process by which persons may comment on the Plan.  A link to that Notice will be provided on this website and the Notice shall be published in the SEC Docket.  The SEC anticipates that Notice of the Plan will be published in the first quarter of calendar year 2009.

After publication and comment, the proposed Distribution Plan will be submitted to the SEC for approval.  When the SEC approves the proposed Distribution Plan, with modifications as appropriate, distributions will begin according to that Plan.

http://www.sec.gov/divisions/enforce/claims/cihc.htm