By Lawrence Delevingne
BOSTON (Reuters) - The co-founder of a Florida financial firm facing investor lawsuits alleging securities fraud has died by suicide, and a spokesperson on Monday denied wrongdoing, saying the death was not connected to a class action lawsuit filed last week.
Eric Holtz, the 54-year-old co-founder of the Seeman Holtz Family of Companies in Boca Raton, took his own life on Friday in California, the company spokesperson confirmed.
Lawsuits claim that Holtz, business partner Marshal Seeman and their insurance and financial firm defrauded elderly investors in South Florida using life insurance policy-backed notes.
The most recent, a class action filed June 7 in South Florida federal court on behalf of 76-year-old Broward County resident Fanny Millstein, alleges the firm sold securities without proper licenses or external controls, resulting in unreturned funds.
The Seeman Holtz spokesperson said that the company had only learned of this lawsuit on Monday. "We deny any allegations of wrongdoing and believe this case is without merit," he wrote.
"There is no indication that Eric's tragic passing is in any way related to this filing," he added.
The Seeman Holtz investment notes, which the firm called “longevity linked assets,” were described as collateralized by life insurance policies issued to third parties that promised to pay a "substantial premium" upon the death of the insured, according to the class action.
The notes were sold as safe and easy to cash out of at maturity, according to the lawsuit. But Millstein was told that the firm was undergoing “financial problems” and needed more time to return her money, which never happened, according to the class action.
“The effects have been devastating for Plaintiff. At age 76, Fanny Millstein should not be forced to contemplate that her and her husband’s life savings invested with Seeman Holtz have vanished,” the lawsuit said.
Attorney Scott Silver, who represents plaintiffs in the class action, said his team had spoken to nearly 100 investors with similar experiences. They represent more than $100 million invested in the Seeman Holtz securities, and Silver believes the actual dollar amount is far greater.
The lawsuit said the firm has been "unwilling or unable" to provide information about the value of the notes or the assets.
The new class action follows similar pending lawsuits filed earlier this year by Silver and other attorneys in Palm Beach County Circuit Court. The Seeman Holtz spokesperson said the company also denies the allegations in those lawsuits.
Seeman, president of Seeman Holtz, did not respond to direct messages seeking comment.