Three Life Partners executives were finally sued by the Securities and Exchange Commission yesterday for insider trading and accounting fraud. On December 16th 2010, Donna Horowitz senior reporter for DealFlow Media was first to report a Life Settlements trade group had sent a letter to the SEC warning about inflated prices the publicly traded company was booking for its life settlement assets. The trade group’s letter combined with Horowitz reporting on the alleged fraud by Brian Pardo CEO of Life Partners have clearly laid the ground work for this massive SEC suit against one of Texas Gov. Rick Perry’s big donors.

Today we see nearly every other finance publication playing catch up to the yearlong investigation of Dealflow Media, which included freedom of information request and in-depth sourcing from insiders victimized or involved in the alleged scheme. The Wall Street Journal today has tried to boast about a page one story they ran in late December 2010 on Life Partners, a story they basically re-jiggered after Horowitz originally broke the news.

Horowitz’s December 16th 2010 story, called Life Partners LEs Too Short?, warned investors about problems one Dallas investment club had found:

Jerry Kingston, who started the Dallas investment club, said the club was shut down because the group that hosts the web portal did not understand the life settlement asset class. He knows of no similar life settlement investment clubs.

“My goal would be to set up an [investment] club locally but I have not been able to find 5 friends to plop $10k each into an investment nobody clearly understands or does not have a moral objection to,” he said in a July email to The Life Settlements Report. “It’s really sad too given the investment environment. LPHI [Life Partners Holdings Inc.] raised over 400 new investors last month alone and those investors plowed in $30.7 million!!!”

Kingston had pitched the club on the professional networking website LinkedIn in August 2009.

Unlike the WSJ, DealFlow and Horowitz stayed on the Life Partners story with bi-weekly reports through out 2011 of investor fraud suits, Texas judges having to excuses themselves because they were too friendly with the Life Partners CEO to rule on cases, and even threats of lawsuits by Life Partners to investors who spoke out about the alleged fraud. To read over 30 articles on how Pardo executed this scheme and has continued to bully nearly anyone who challenges him, including the SEC and its auditor, you can buy single copies of Horowitz reporting here.

Pardo told journalist yesterday he plans to vigorously fight the SEC’s suit. Sam Antar, stock fraud expert, told me after the SEC suit was made public, “Criminal fraud is harder to prove and discovery is easier in civil cases. That’s why you see the SEC sue first sometimes.”

Life Partners preyed on main street investors and novice investor clubs to promote investments into its company but if you were reading DealFlow’s reporting, for over a year, you would have at least been forewarned to what regulators now reveal was a revenue and stock manipulation fraud.

Life Partners closed down 17 percent in trading today closing at $5.26 and the NASDAQ listed stock had a 52-week high of $16.83.