When Financial Resources Mortgage of Meredith closed in 2009, in the face of criminal charges and federal investigations, investors lost over $30 million. New Hampshire will be establishing a fund to repay some victims their initial investments.
Sponsored by Senators Lou D'Allesandro (D-Manchester) and Peter Bragdon (R-Milford), the bill will create a victim compensation fund that will receive $3 million a year from fines and penalties collected by the Bureau of Securities Regulation and other agencies. According to the bill, victims would file to claim for half of their financial loss up to $500,000, Forbes reports.
Supporters of the fund say that victims of Financial Resources Mortgage of Meredith should be compensated for their loss because the New Hampshire Attorney General, the Bureau of Securities Regulation, and the Banking Department failed to stop the fraud and failed to follow up on red flags. Bragdon called it a “complete failure of state government.”
Democrat Senator Sylvia Larsen (Concord) agreed that the state government should have done more to halt the fraudulent activity, but stressed that the fund would be “reimbursing people for what were very, very risky investments,” the Seacoast Online reported. D'Allesandro said the aim of the fund was to ‘right wrongs' not “restore every dollar” to investors. However, according to the article, opponents of the bill fear it will establish a precedent.
According to Forbes, a court order that specifies the amount of entitled restitution must be obtained by each victim prior to filing a claim. Limitations are also in place that will prevent anyone taking part in the fraud from seeking restitution, as well as those who profited or would have profited from the fraud. Claims can be filed for losses that occurred after January 1, 2006.