Funeral Service & Cremation 
Alliance of Wisconsin

Proposed settlement will cover those who bought prepaid funerals

20 Jun 2013 8:33 AM | Anonymous
The beleaguered Wisconsin Funeral Trust is nearing completion on negotiations aimed at collecting about $10 million from money managers and various consultants undefined including Wall Street giant Morgan Stanley Smith Barney undefined to recoup losses from high-risk trades and investments.

"We are working through the final details of a couple of rather significant settlements," John Wirth, the receiver for the trust, told Dane County Circuit Judge Peter Anderson in a letter. The letter did not disclose details of the talks.

The trust, which was created by the Wisconsin Funeral Directors Association in 1999, was put into receivership in September after regulators discovered a $21 million shortfall in the fund undefined a figure that has since increased to $24.5 million. Marketed as a conservative investment, the trust actually poured millions into a variety of high-risk vehicles, including leveraged hedge funds, private equities and futures, regulators said. The fund has been under water since at least 2007. The U.S. Securities and Exchange Commission is reviewing the fund's aggressive strategies.

The fund, which is supposed to have $70 million on hand but actually has less than $50 million, had collected money from about 10,000 people who wanted to ensure that their funeral costs would be covered. Funeral directors who sold the investments have been honoring those contracts, and a separate settlement agreement filed in court Wednesday calls for that practice to continue.

"The settlement ensures that all consumers whose funds were deposited in the trust will receive the funeral, burial merchandise and services called for in their burial agreement," Wirth said in a statement about the agreement filed in court Wednesday.

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