Tulsa World: SEC asks Pre-Paid Legal for documents

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SEC asks Pre-Paid Legal for documents

By LAURIE WINSLOW, World Staff Writer
Published: 10/6/2009 2:47 PM
Last Modified: 10/6/2009 10:34 PM

Pre-Paid Legal Services Inc. has received a subpoena from the Securities and Exchange Commission to produce a variety of documentation, the company announced Tuesday.

“The subpoena was surprising to all of us,” said Randy Harp, chief operating officer.

The subpoena from the SEC’s Division of Enforcement requires the Ada-based public company to produce a variety of documents, including those pertaining to a stock repurchase program that Pre-Paid has had since April 1999.

Other documents requested include those pertaining to the company’s Affirmative Defense Response System program and other marketing practices; membership statistical information; segment reporting; a contingency disclosure to the Federal Trade Commission; and other operational practices.

The investigation is a fact-finding inquiry and does not mean that the SEC has reached any conclusions, the company stated in a news release.

Harp, in a telephone interview, said the company’s ADRS program is a marketing methodology that centers around identity theft and data security.

With the program, Pre-Paid goes to companies and presents — at no charge — informational materials to them and their employees that help them understand data security, Harp said.

For about two years, Pre-Paid has been disclosing in its public filings questions the FTC had about ADRS, Harp said.

“We’ve always fully cooperated, I think, in any kind of regulatory questions because we always feel we have very good answers to their questions,” he said. “It’s not something we enjoy spending our time doing. We don’t think it’s in the best interest of our shareholders, but it’s a necessary part of being a public company. We will comply fully and expect good outcomes.”

The SEC, when contacted, did not confirm or deny the existence of any investigation involving Pre-Paid.

Pre-Paid said that it also is responding to comments received by the SEC Division of Corporation Finance pertaining to the company’s Form 10-K for 2008 and its definitive proxy statement.

The 10-K is a comprehensive summary of a company’s performance that must be submitted annually to the SEC.

Pre-Paid provides legal- service plans to customers across the United States and Canada through a network of independent provider law firms.

Recently, Pre-Paid was named among the “100 Best U.S. companies for 2008” in the sixth annual Best Company Award by DeMarche Associates Inc., a U.S. investment research firm.

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By LAURIE WINSLOW, World Staff Writer

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Reader comments for this story have been moved to the most updated version of the story, now under the headline "SEC asks Pre-Paid Legal for documents," which was published on 10/7/2009. So far, 6 comments have been made.