In the second scheme, Lindberg and Herwig advised Private Bankers Life & Annuity Co. to manipulate its balance sheet with dubious securities and repurchase agreements that violated insurance laws. This deceptive practice ultimately helped them pocket over $21.4 million in advisory fees from misled clients.
Guilty Pleas and Legal Consequences
The legal net has been tightening around Lindberg and his associates. Lindberg entered a plea deal in November, admitting to charges of deceiving North Carolina insurance regulators. Meanwhile, Herwig pleaded guilty in December 2022 to conspiracy charges tied to the repackaging of insurer investments. Additionally, Lindberg was convicted of bribery in May for attempting to sway North Carolina Insurance Commissioner Mike Causey through campaign contributions.
The SEC reached settlements with Herwig in July 2023 and Lindberg last week, barring both from future securities law violations and requiring them to pay disgorgement and civil penalties, though the amounts remain undetermined.
Uncontested Judgment Against SASL
Despite mounting evidence, SASL failed to respond to the SEC’s motion for summary judgment, filed in January. Judge Eagles emphasized that SASL had provided “no evidence that creates a disputed question of material fact as to SASL’s liability,” nor had it challenged the SEC’s legal arguments.
What’s Next for Lindberg and SASL?
Lindberg’s attorney, Brandon McCarthy, framed the ruling as a move toward restitution for policyholders rather than government penalties. “We have already reached a positive resolution with the Department of Justice, and the SEC is following suit under the same terms,” he stated. “Thus, the money will now go to the policyholders instead of the federal government. As that is Mr. Lindberg’s primary goal, we find that acceptable.”
