Jump to content

User:16912 Rhiannon/LegalShield History

From Wikipedia, the free encyclopedia

Line-by-line comparison:

History

[edit]

suggesting addition of new sub-heading for all info relating to Pre-Paid Legal:

[edit]
First paragraphs already reviewed

Suggested new first sentence: LegalShield was established as Sportsman's Motor Club in 1972, then known as Pre-Paid Legal Services, Inc. from 1976 until its acquisition by MidOcean Partners in 2011.[1][2]

+++

Original text: On July 11, 1969, former CEO and founder Harland C. Stonecipher of Ada, Oklahoma, was involved in a motor vehicle accident and was hospitalized. Although the other party was cited for fault, they filed a suit against him for the accident.[3] He hired a lawyer to defend himself in court, but in doing so, depleted his life savings.

Proposed new text: Harland Stonecipher (1938–2014) served as the company's founding president and chief executive officer (CEO).[4][5] The life insurance salesman from Ada, Oklahoma, created Pre-Paid's predecessor, a "motor service club", after being involved in a car accident in 1969. Although the other party was cited for fault, they filed a suit against him for the accident. Stonecipher had health, life, and vehicle insurance coverage, but was required to hire a lawyer to defend himself in court and struggled to pay associated legal expenses.[6]

+++

Original text: After researching the industry of European legal expense plans, Stonecipher created Pre-Paid Legal's predecessor, the Sportsman’s Motor Club, on August 8, 1972. The club offered legal expense reimbursement to its members.

Proposed new text: After researching the industry of European legal expense plans, he created the Sportsman's Motor Club to reimburse members for legal fees.[6][7]

+++

Original text: Pre-Paid Legal began using "network marketing" (multi-level marketing or MLM) in 1983. Note: I've been unable to find a source to confirm this detail.

Proposed all new text to fill in a blank in the History: The club changed its name and incorporated as Pre-Paid Legal Services, Inc. in 1976,[8] becoming the first company in the United States to provide pre-paid legal plans for individuals.[6] Initially, members could choose their own lawyer and seek reimbursement from Pre-Paid, but by the 1980s, the company established a way to direct members needing legal assistance to preselected firms.[6]

+++

Original text: Pre-Paid Legal went public on the NASDAQ National Market System in 1984. In 1997, Pre-Paid Legal bought the People's Network (TPN), a satellite television network dedicated to personal development. Two years later, the company moved to the American Stock Exchange and then on May 13, 1999, Pre-Paid Legal was listed on the New York Stock Exchange.[9]

Proposed new text: The company went public in 1984.[10] Pre-Paid was first listed on the NASDAQ, then moved to the American Stock Exchange in 1986,[11][12] followed by the New York Stock Exchange in 1999, being listed as "PPD".[5][13][14] In 1998, Pre-Paid acquired The People's Network, a marketing company based in Dallas.[15][16]

Original text: In July the same year, the company was forced by the U.S. Securities and Exchange Commission (SEC) to stop counting the commissions they paid out to sales associates as assets, instead of expenses,[17] the same way other types of insurance companies do, though they did not release their updated, halved, 2000 earnings figures until February 2002.[18]

Proposed new text: In 2001, the Securities and Exchange Commission required Pre-Paid to stop counting the commissions paid out to sales associates as assets, instead of expenses, which reduced reported earnings by over half.[4] Pre-Paid did not file its financial statements for 2000 until February 2002. The statements showed decreases in earnings from $43.6 million to $20.5 million and stockholder equity from $147 million to $42 million.[19]

+++

Original text retained but moved down to follow SEC details, only change is "In 2001" replaced with "Also that year"; please note that the Deseret News citation mentions the penalties against Pre-Paid but does not confirm the specific details included here": Also that year, the Wyoming Attorney General issued a press release announcing "When we discovered that Pre-Paid was using prohibited income representations to promote their multilevel marketing program, we warned them that the representations were prohibited by Wyoming law". Pre-Paid paid $4,000 in lieu of civil penalties, reimbursed the state for $1,000 in costs, and refunded $2,000 to participants who claimed to have been misled.[20][21]

+++

New proposed text to provide additional detail and context around the company's development and to note Alabama lawsuits not currently mentioned in the article: The Denver Business Journal reported in 2002 that Pre-Paid earned a $27.1 million profit on $303.7 million in revenue, an increase from its $1.9 million profit on revenues of $129.6 million in 1997, and provided its members access to a network of 46 firms with 1,270 lawyers.[22]

About 30 lawsuits by approximately 250 plaintiffs were filed in Alabama in 2004 against Pre-Paid. All of these were dismissed or settled by 2006.[13]

+++

Original text: Pre-Paid Legal has faced ongoing troubles in Mississippi. After the company settled complaints in 2001, a number of similar suits arose. The company won in a jury trial against two plaintiffs,[23] but after losing others, including one in which a former customer was awarded $9.9 million[17][24] settled with more than 400 others.


New proposed text, providing details as to the nature of the legal cases in Mississippi and their outcomes, and still retaining all details from the current article: Pre-Paid faced two lawsuits in Mississippi in October 2004 and February 2005. A jury ruled in favor of the company in the first suit. In the second suit a jury found Pre-Paid and Stonecipher guilty of deceptive advertising and fraud.[4] In November 2005, Pre-Paid and Stonecipher were required to pay $9.9 million in punitive damages.[25] TheStreet.com reported that Pre-Paid faced additional lawsuits filed by 400 Mississippi plaintiffs. These were ultimately settled.[13] TheStreet.com also noted that the company has had a number of legal successes, including the defeat of a class action lawsuit alleging the company was a pyramid scheme, as well as overturning a fraud verdict.[25]

+++

Original text: The company, and the U.S. Chamber of Commerce of which Pre-Paid Legal CEO Harland Stonecipher is a director,[26] have described the lawsuits against the company as "frivolous" and "abusive".[27]

New proposed text, correcting detail re: Chamber of Commerce: The company and the Oklahoma Chamber of Commerce, of which Stonecipher served as a director,[5] described the lawsuits against the company as "frivolous" and "abusive".[28]

+++

Original text: Pre-Paid Legal reported to the SEC that less than 25% of its sales representatives sold more than one insurance plan in 2005, but avoids reporting such information to prospective sales representatives.[29]

New proposed text, providing more details: Pre-Paid's independent auditor was unable to approve the company's 2004 financial statements because of "material weaknesses" related to the processing of commissions.[4] New rules proposed by the Federal Trade Commission (FTC) required Pre-Paid to disclose to potential associates that less than 25 percent of its sales representatives sold multiple insurance plans in 2005, which the company confirmed in a U.S. Securities and Exchange Commission (SEC) filing.[13]

+++

Original text: In October 2009, Tulsa World reported[30] that Pre-Paid Legal had been subpoenaed by the SEC for various documents including those pertaining to a stock repurchase program that Pre-Paid started in April 1999. (And in 2006, the company said it would repurchase $27.4 million of shares owned by executives.)[29] The SEC reported that thus far that its demand for documents is a "fact finding" mission.

New proposed text, SEC subpoena is omitted here as this is covered below in the more detailed discussion of the SEC inquiry: In November 2006, Pre-Paid announced plans to spend $27.4 million to repurchase shares owned by executives.[13]

+++

Original text: On November 19, 2009, Pre-Paid Legal announced[31] that it received a complaint from the Federal Trade Commission (FTC). The proposed draft complaint alleged that Pre-Paid's "ADRS program and related materials violate Section 5(a) of the FTC Act regarding asserted misleading representations, express or implied."[32]

New proposed text, providing the date when the investigation began and noting the change in marketing materials prompted by the FTC complaint (neither of these are currently mentioned): In 2007, the FTC began investigating Pre-Paid's marketing of its identity theft service and Affirmative Defense Response System (ADRS), which the company developed to increase group sales. Pre-Paid changed its marketing materials in 2009, after regulators found the company’s claims misleading regarding ADRS.[33]

+++

Original text: On July 27, 2010 the FTC ended its three-year investigation of Pre-Paid Legal Services, Inc. without any action.[34]

New proposed text, retaining mention of the end of the FTC investigation and summarizing the continuing SEC inquiry, providing more detail than currently included in the article: According to an SEC filing, the FTC and Pre-Paid "[reached] a mutually agreeable solution", and in 2010 the agency ended its three-year investigation without any action. Pre-Paid remained the focus of an informal SEC inquiry; the agency requested documentation about the company's stock repurchasing, consumer complaints related to provider law firms, payment card compliance, Stonecipher's resignation in April 2010,[2] as well as the resignation of director Tom Smith.[33]

+++

New proposed text, to provide a detail to show the company's growth; can be cut if editors are not comfortable with this sourcing: The company reportedly earned $454 million in 2010.[35]

  1. ^ Burkes, Paula (September 7, 2014). "Executive Q&A: LegalShield chief comes home to Oklahoma roots". The Oklahoman. Oklahoma City: The Oklahoman Media Company. Retrieved February 24, 2017.
  2. ^ a b "Pre-Paid Legal in $650 Million Buyout". The New York Times. January 31, 2011. ISSN 0362-4331. OCLC 1645522. Retrieved March 7, 2017.
  3. ^ "Pre-Paid Legal Services, Inc. | Executive Bios". prepaidlegal.com. Retrieved March 7, 2010.
  4. ^ a b c d Davis, Melissa (February 22, 2005). "Pre-Paid Weathers Guilty Verdict". TheStreet.com. Retrieved March 6, 2017.
  5. ^ a b c "U.S Chamber Reappoints Harland Stonecipher CEO of Pre-Paid Legal Services, to Board of Directors". United States Chamber of Commerce. June 27, 2005. Archived from the original on December 2, 2006. Retrieved March 7, 2017.
  6. ^ a b c d Martin, Douglas (November 20, 2014). "Harland Stonecipher, Insurance Pioneer, Dies at 76". The New York Times. Retrieved March 7, 2017.
  7. ^ Swanson, Eric (November 11, 2014). "LegalShield founder and community booster Harland Stonecipher dies at 76". Ada Evening News. Retrieved March 9, 2017.
  8. ^ "Form 10K Pre-Paid Legal Services, Inc". United States Securities Exchange Commission. December 31, 2010. Retrieved June 26, 2017.
  9. ^ "Pre-Paid Legal Services, Inc. | The Pre-Paid Legal Story". prepaidlegal.com. Retrieved March 7, 2010.
  10. ^ Gene Lehmann (August 23, 2011). "New firm to rebrand Pre-Paid Legal in Ada". The Ada News. Retrieved 26 June 2017.
  11. ^ The Big Book of Home Business Company Directory. Ouvrage Collectif. June 21, 2016. p. 48. Retrieved March 9, 2017.
  12. ^ Adelson, Andrea (May 26, 1996). "Earning It; Getting Legal Advice, Without Billable Hours". The New York Times. Retrieved March 9, 2017.
  13. ^ a b c d e Duhigg, Charles (November 13, 2006). "Why Short Sellers Want to Crash the Tupperware Party". The New York Times. Retrieved March 7, 2017.
  14. ^ "Hardland Stonecipher". The Oklahoman. November 12, 2014. Retrieved March 9, 2017.
  15. ^ "Pre-Paid Legal acquires satellite TV channel". The Journal Record. Oklahoma City, Oklahoma. September 25, 1998. Retrieved May 9, 2017.
  16. ^ Hogan, Gypsy (September 25, 1998). "Pre-Paid Legal Plans Satellite Channel Buy". The Oklahoman. Retrieved May 9, 2017.
  17. ^ a b "Pre-Paid Weathers Guilty Verdict", TheStreet.com
  18. ^ Morgenson, Gretchen (April 18, 2003). "Exchange to Warn Investors on Companies". New York Times.
  19. ^ Morgenson, Gretchen (April 18, 2003). "Exchange to Warn Investors on Companies". The New York Times. Retrieved March 7, 2017.
  20. ^ Bernick, Bob, Jr. (October 30, 2008). "Shurtleff's Fundraising Trounces Hill's | Deseret News (Salt Lake City) Newspaper | Find Articles at BNET". FindArticles.com. Archived from the original on October 31, 2009. Retrieved October 23, 2009.{{cite news}}: CS1 maint: multiple names: authors list (link)
  21. ^ "Newell letter" (PDF). Retrieved October 23, 2009.
  22. ^ Fletcher, Amy (September 15, 2002). "Prepaid legal is a cheaper way to get lawyer's services". Denver Business Journal. Retrieved March 9, 2017.
  23. ^ Davis, Melissa (October 20, 2004). "Pre-Paid Prevails in Mississippi Case; Financial Articles & Investing News". TheStreet.com. Retrieved October 23, 2009.
  24. ^ "Verdict Hammers Pre-Paid, TheStreet.com
  25. ^ a b Davis, Melissa. "Verdict Hammers Pre-Paid". TheStreet.com. Retrieved March 7, 2017.
  26. ^ "U.S. Chamber of Commerce - June 27 - U.S Chamber Reappoints Harland Stonecipher, CEO of Pre-Paid Legal Services, to Board of Directors". USChamber.com. U.S. Chamber of Commerce. June 27, 2005. Retrieved October 23, 2009.
  27. ^ "U.S. Chamber of Commerce - Nov 24 - Chamber Joins Miss. Case against Frivolous Lawsuits - Pre-Paid Legal Services Targeted Improperly". USChamber.com. November 24, 2004. Retrieved October 23, 2009.
  28. ^ "Chamber Joins Miss. Case against Frivolous Lawsuits Pre-Paid Legal Services Targeted Improperly". United States Chamber of Commerce. November 24, 2004. Retrieved March 7, 2017. {{cite web}}: Check |archive-url= value (help)
  29. ^ a b Duhigg, Charles (November 13, 2006). "Why Short Sellers Want to Crash the Tupperware Party". New York Times. Retrieved October 14, 2009.
  30. ^ "SEC asks Pre-Paid Legal for documents". Tulsa World. Retrieved October 23, 2009.
  31. ^ "Pre-Paid Legal Services Announces FTC Developments". Pre-Paid Legal Services. Retrieved November 19, 2009.
  32. ^ "Pre-Paid Legal (PPD) Received Draft Complaint from FTC Relating to ITSADRS Program". StreetInsider.com. November 11, 2009. Retrieved September 26, 2010.
  33. ^ a b Mecoy, Don (July 27, 2010). "FTC ends investigation of Pre-Paid Legal". The Oklahoman. Retrieved March 7, 2017.
  34. ^ "FTC ends investigation of Pre-Paid Legal". July 27, 2010. Retrieved July 28, 2011.
  35. ^ Seale, Barbara (March 1, 2012). "LegalShield: Expanding Justice for All". Direct Selling News. Retrieved March 1, 2017.
Retrieved from "https://en.wikipedia.org/w/index.php?title=User:16912_Rhiannon/LegalShield_History&oldid=1092622411"