CONCORD – Victims of the Financial Resources Mortgage scandal could qualify for state payments under legislation that cleared the State Senate Thursday.
Senate President Peter Bragdon, R-Milford, said the Lakes Region-based Ponzi scheme was unique in that several agencies failed to properly regulate FRM and allowed it to go bankrupt which cost the victims up to $30 million in losses.
“Where I crossed the line was because this was an entity clearly in violation of the state laws and was allowed to continue,” Bragdon said.
The Senate passed the bill over to the House of Representatives on a voice vote after financing for the victims fund was dramatically altered. Originally, Bragdon proposed a $20 million fund to come from a portion of license fees paid by insurance companies, banks and firms selling securities in the state.
After industry lobbyists complained that the bill threatened the state’s regulatory budgets Bragdon agreed to change the financing to exempt banks and insurers from it. The fund would get 50 percent of money from security firms in excess of that agency’s budget and 50 percent of money from private settlements with state prosecutors.
“This is the start of providing recovery for those who lost money due to the state’s inability to properly supervise FRM,” Bragdon said. “It is incredulous to think that this state-licensed business, which over the period of nine years racked up more than 70 violations of state financial laws, was allowed to stay open to prey on New Hampshire citizens.”
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