SEC v. Jay Daniel Seinfeld, et al.
Case Number: 1:19-cv-910 (W.D. Tex.)
On September 16, 2019, the Commission filed a complaint against Jay Daniel Seinfeld (“Seinfeld”), Sara Beth Postma (“Postma”), Traditions Capital Management LLC ("TCM"), and Hospice Patient Aid Program Inc. ("HPAP") (collectively, "Defendants"). The Complaint alleged that Seinfeld, who was based in New York, hired Texas-based social worker Postma, and founded the Hospice Patient Aid Program to gain access to hospices and terminally ill patients throughout Texas. According to the Complaint, between 2010 and 2012, Seinfeld and Postma induced over a dozen such patients to provide their personal information and sign transaction documents as purchasers of corporate bonds that would pay out upon their deaths while simultaneously relinquishing most of the bonds' anticipated proceeds. Using documents supplied by Seinfeld, Postma allegedly led the patients to believe that the HPAP would use bond proceeds to assist hospice patients in need of financial assistance; instead, when patient-purchasers died, Seinfeld allegedly redeemed the bonds and split a large majority of the profits - hundreds of thousands of dollars in the aggregate - with other wealthy investors. See Complaint
Defendants were ordered to pay a collective total of $812,787.52 in disgorgement, prejudgment interest, and civil penalties. See Defendants’ Final Judgment.
On June 25, 2021, the Court issued an Order establishing a Fair Fund (the “Fair Fund”) for the $795,229.57 paid by Defendants, and for any additional amounts collected pursuant to the Defendants’ Final Judgment; appointing Miller Kaplan Arase LLP (“Miller Kaplan”) as Tax Administrator; appointing Sondra Panahi, a Commission employee as Distribution Agent to assist in overseeing the administration and distribution of the Fair Fund; approving the Commission’s Plan of Distribution of the Fair Fund (the “Plan”); and authorizing the Commission to pay tax obligations, and the fees and expenses of the Tax Administrator and a third-party company that will assist the Distribution Agent, from the Fair Fund without further order of the Court. See the Court’s Order and the Plan.
The Plan provides that the distribution of the Fair Fund shall be made to the twenty (20) Eligible Investors (Investors in this matter were terminally ill patients, and at present, all of the Eligible Investors are deceased) whom Defendants either effected bond redemptions upon their death or from which the Defendants exercised an annuity survivor’s option upon their death and retained most if not all the proceeds.
On October 1, 2021, the Commission filed a motion requesting an order to disburse $269,580.36 from the Net Available Fair Fund to eligible investors in accordance with the Plan. See the Commission’s Motion. On October 10, 2021 the Court entered an Order approving the Commission’s motion. See Order. Court Order.
On May 5, 2022, the Commission filed a motion requesting an order to disburse $231,068.88 from the Net Available Fair Fund to eligible investors in accordance with the Plan. See the Commission’s Motion. On May 10, 2022, the Court entered an Order approving the Commission’s motion. See Order.
The distribution in this matter is ongoing.
For more information, please contact the Commission:
Office of Distributions