Tulsa World: SEC asks Pre-Paid Legal for documents

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SEC asks Pre-Paid Legal for documents
It wants papers including those pertaining to a stock repurchase program.

By LAURIE WINSLOW World Staff Writer
Published: 10/7/2009 2:24 AM
Last Modified: 10/7/2009 4:28 AM

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.

Laurie Winslow 581-8466
laurie.winslow@tulsaworld.com By LAURIE WINSLOW World Staff Writer

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Some reader comments for this story were copied from "SEC asks Pre-Paid Legal for documents," which was published on 10/6/2009.

	Report Comment WideAwake, (10/6/2009 3:40:05 PM) I don't see how this is news.
	Report Comment Ric, Broken Arrow (10/6/2009 4:10:28 PM) It's news because their stocks I believe have been rising quite a bit in the past. Becoming a big buz.
	Report Comment Oilsooner, Tulsa (10/6/2009 4:31:44 PM) "this is a fact finding inquiry and does not mean the SEC has reached and conclusions" HAHAHA Please. The SEC is gathering evidence, not looking through documents because they have little else to do. Pre-paid legal is a scam. Those who dont know it are about to get educated.
	Report Comment kmtulsa, Tulsa (10/6/2009 11:25:59 PM) I totally disagree that Pre-paid Legal is a scam. I have worked as a receptionist in a law office on and off for over 5 years now. During that time, I have witnessed many people that could not otherwise afford an attorney actually meet with one for an hour, present their case and get the attorneys opinion if they should move forward. The attorney was always honest with them and if they had a case would tell them so...the same if not. I never saw or talked to an unhappy client of Pre-paid Legal services. Their staff is pleasant and easy to talk with, as well. I am not sure of their stock, etc., just my personal experience with them.
	Report Comment billy8, Sand Springs (10/7/2009 9:46:56 AM) This is about their dealings with they company stocks, not how they administer to clients. I have used them for 2 years and have had very good service that was informative and fast. Most of what I had done with them was done over the phone and mail with very little cost and all matters were resolved quickly and to my satisfaction. It's nice to know you can contact a lawyer any time it's needed without having to search one out and pay exorbinate retainers.
	Report Comment billy8, Sand Springs (10/7/2009 3:09:42 PM) as a member of pre-paid legal, and one who has used the services with great satisfaction, I have never been asked to pay a friend to join or to encourage friends and family to join for a bonus. I don't know where you got that information, but it has not been my experience at all, and several others I know have not had that happen either. you're just spreading rumors without proof chucjordan.

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