July 20, 2026, No. 7:26-cv-01513

By David Brunk, civil litigation attorney

Read the complaint

Cori-Schubert De Cori v. HASelect-Waterford LLC

Cori-Schubert De Cori, acting as Trustee of The Cori-Schubert De Cori Revocable Trust and on behalf of a proposed class of investors, has filed a class action complaint against HASelect-Waterford LLC, Griffin Capital Management LLC, Griffin Asset Management LLC, Michael Griffin, and Marcum LLP. The lawsuit, filed in February 2026, alleges that the defendants engaged in a scheme to manipulate the net asset value (NAV) of the Waterford life settlement fund, thereby misleading investors and enabling the extraction of excessive fees.

According to the complaint, the Griffin Defendants are accused of systematically inflating Waterford's NAV by applying artificially low discount rates to the valuation of life insurance policies. This practice allegedly inflated the fund’s value by 25–40%, contrary to market rates that implied higher discount percentages. Marcum LLP, the fund's auditor, is accused of issuing unqualified audit opinions from 2017 to 2023, supposedly overlooking red flags that could have exposed the alleged scheme.

Alleged NAV Manipulation by Griffin Defendants

The complaint alleges that the Griffin Defendants, through their management of HASelect-Waterford LLC, systematically manipulated the net asset value (NAV) of the fund by artificially suppressing discount rates applied to life insurance policy valuations. Specifically, the Defendants employed discount rates of 10-12%, which are significantly lower than the market-implied rates of 15-18%, thereby inflating the fund's NAV by 25-40% (Compl. ¶40–41).

This manipulation of discount rates allegedly increased the fund's reported NAV, enabling the Griffin Defendants to accrue excessive fees. The critical nature of discount rate determination is underscored in the complaint, which describes it as "the most critical valuation input" whose modification can lead to substantial valuation fluctuations (Compl. ¶34). The artificial inflation of the NAV not only misrepresented the fund's performance but also purportedly led to overestimated returns that were not realized in practice. These allegations form a core component of the claims against the Griffin Defendants as they contest the soundness of the strategic valuation and financial reporting practices employed by the management entities.

The allegations remain to be proven, as no responses have yet been filed by the defendants.

Financial Details and Investor Impact

According to the complaint, the investors contributed a total of $54.4 million to HASelect-Waterford LLC ("Waterford") by December 31, 2021. The plaintiff, Cori-Schubert De Cori, claims that these contributions were significantly impacted by inflated net asset value ("NAV") calculations, allegedly orchestrated by the Griffin Defendants to extract excessive fees.

By December 31, 2021, Waterford reported its NAV as $70,014,980, a figure the plaintiff argues was artificially increased through manipulated discount rates applied to life insurance policy assets.

In 2019, the Griffin Defendants also purchased 28 policies for $5,752,357 and marked them up by 26.7%, leading to a post-markup valuation of $7,290,650 (Compl. ¶50). These transactions are part of the broader allegation of inflated asset valuations maintained by the Griffin Defendants.

The plaintiff's own financial involvement in Waterford underscores the alleged impact on individual investors. Between 2017 and 2021, the plaintiff contributed a net total of $850,000, with more than $760,000 of these funds now claimed to be "trapped" as a consequence of the purported NAV inflation. The complaint quantifies the purported overstatement in policy valuations, noting that the average intra-year markup on policies was 39.4%.

These alleged maneuvers by the Griffin Defendants, according to the complaint, misrepresented the fund's financial health, causing investors to misjudge the fund’s performance and retain or increase their investments under false pretenses. As of March 31, 2022, the Fund had $16.8 million in redemption requests outstanding following its December 2021 suspension of redemptions (Compl. ¶110). The allegations outlined in the complaint have yet to be proven in court, and the defendants have not yet submitted their responses to these claims.

Roles and Parties Involved

The class action complaint is brought by Cori-Schubert De Cori, acting as trustee for The Cori-Schubert De Cori Revocable Trust, on behalf of herself and all others similarly situated. The trust represents the interests of a proposed class of investors who suffered potential losses from the management and financial operations of HASelect-Waterford LLC (hereinafter "Waterford").

Waterford, the fund entity at the center of the suit, is accused of perpetrating a fraudulent scheme to inflate its net asset value (NAV) through systematic manipulation of reported figures. Griffin Capital Management LLC (referred to as "GCM") and Griffin Asset Management LLC ("GAM"), along with Michael Griffin, identify as key decision-makers and operational managers of Waterford. These defendants are alleged to have suppressed discount rates used in the valuation of life insurance policies, effectively exaggerating the fund’s NAV to extract exorbitant fees. As detailed in the complaint, the manipulation of these rates was intended to mislead investors about Waterford's true performance.

The plaintiff asserts that these NAV calculations were bolstered by systemic interest rate suppression practices, allegedly resulting in nearly $10.7 million in portfolio value inflation due to a discount rate adjustment from 18% to 12.25% (Compl. ¶111).

Marcum LLP, responsible for auditing Waterford, is another defendant in the case. The auditing firm allegedly issued unqualified audit opinions despite notable red flags and disclaimers highlighted by Lewis & Ellis, the valuation firm utilized by Waterford. The complaint asserts that Marcum’s failure to conduct independent analyses or challenge the imprudent valuations facilitated the continuation of the misconduct and led to the vast financial discrepancies at the fund.

These allegations have yet to be proven in court, and no defendant has submitted a formal response to the claims in the complaint as of the filing date.

Legal Claims and Statutory References Part I

The class action lawsuit initiated by Cori-Schubert De Cori, Trustee of The Cori-Schubert De Cori Revocable Trust, includes a central charge of breach of fiduciary duty against Griffin Capital Management LLC (GCM) and Griffin Asset Management LLC (GAM) under Delaware law. The complaint alleges that GCM and GAM manipulated discount rates to artificially inflate the fund's net asset value (NAV), facilitating the extraction of excessive fees while misleading investors about the fund's performance (Compl. ¶205). It is claimed that GCM and GAM’s actions amounted to self-dealing and were not in accordance with fair dealing standards expected under Delaware corporate governance principles. Moreover, allegations were made under the Illinois Securities Law of 1953, §§ 12(F), 12(G) against GCM, GAM, and Michael Griffin (Count III).

The complaint details that the defendants’ persistent manipulation of discount rates had been a core method by which they maintained inflated valuations of the fund's assets. Specifically, it is alleged that GCM and GAM utilized discount rates significantly lower than those prevalent in the market—10-12% as opposed to the market rates of 15-18%. This inflation of asset values allowed the Griffin defendants to charge fees based on an overstated NAV, thereby allegedly redistributing investor funds to themselves as fees (Compl. ¶190).

The allegations underline the plaintiffs’ contention that these practices breached the fiduciary duty owed to the investors. The complaint argues that such actions remove the protective shielding typically afforded by Delaware law’s exculpatory clauses, thereby exposing GCM and GAM to liability for their asserted misconduct.

Legal Claims and Statutory References Part II

The complaint in Cori-Schubert De Cori, Trustee of The Cori-Schubert De Cori Revocable Trust, et al. v. HASelect-Waterford LLC, et al. includes several counts involving alleged statutory violations and professional misconduct.

Count IV brings allegations of professional malpractice and accounting malpractice against Marcum LLP. According to the complaint, Marcum failed to comply with the Public Company Accounting Oversight Board (PCAOB) standards, including those outlined in AS 1105, AS 1015, AS 2501, AS 2301, and AS 2110, by not obtaining sufficient audit evidence, neglecting to investigate clear fraud risks, and issuing unqualified audit opinions despite receiving disclaimers from the valuation firm L&E (Compl. ¶259). The suit further claims that due to these failures, Marcum’s audit amounted to "no audit at all." The firm’s alleged conduct was said to have harmed investors by masking the discrepancies in policy valuations, which inflated the Fund’s NAV (Compl. ¶275).

The complaint also alleges aiding and abetting violations through Marcum's failure to address these discrepancies, particularly in breaching their fiduciary duties and obligations under their professional standards (Count V). Allegations of professional negligence by Marcum further claim the firm’s conduct warrants damages due to recklessness and failure to conduct an adequate audit that adhered to industry standards.

These allegations remain contested, as the defendants have not yet filed a response to the complaint, and no findings of liability have been made by the court.

Distinctive Elements in Filing

The complaint in Cori-Schubert De Cori v. HASelect-Waterford LLC alleges what it terms "systematic overvaluation to generate excessive fees," describing these actions as "quintessential bad faith and disloyalty" on the part of the Griffin Defendants (Compl. ¶37). This assertion forms a central part of the plaintiff's case against Griffin Capital Management LLC (GCM), Griffin Asset Management LLC (GAM), and associated individuals.

A significant element highlighted in the filing is the role of Marcum LLP, the auditor for HASelect-Waterford LLC.

Marcum's audit practices are heavily scrutinized in the complaint, with a claim that these audits "amounted to 'no audit at all'" (Compl. ¶259). This assertion is based on an alleged failure to conduct substantive testing in material areas, a factor which the plaintiff contends prevented the timely detection of valuation irregularities and potential fraud. The SEC's enforcement action against Marcum, resulting in a $10 million penalty, further underscores the systemic quality control failures highlighted in the complaint (Compl. ¶121).

These distinctive points in the class action complaint illustrate the myriad ways in which the plaintiff claims the defendants breached fiduciary duties and mishandled the fund's assets, including allegations of aiding and abetting the breach of fiduciary duty (Count V). As the litigation progresses, the allegations remain unproven, and no defendants have yet filed responses to the claims.

Relief Sought and Procedural Posture

The plaintiff, Cori-Schubert De Cori, requests the appointment of a receiver or liquidating trustee to manage the wind-down of HASelect-Waterford LLC. This measure is sought to ensure a structured and equitable dissolution of the fund, as opposed to a mere monetary judgment, which, according to the complaint, "compensates for past harm but does nothing to prevent ongoing harm" (Compl. ¶231). The complaint emphasizes the necessity of such an appointment to address the fund’s current lack of auditor oversight and portfolio management, as noted in 2025 (Compl. ¶227).

The fund’s operational deficiencies since 2025, where it continues without critical governance structures or independent oversight, underscore the need for judicial intervention to manage and potentially salvage the fund's remaining assets effectively. This plea for court supervision dovetails with the allegations of deliberate mismanagement and self-dealing by Griffin Capital Management LLC and its affiliates, suggesting that without intervention, the plaintiff and other investors could continue to suffer financial detriment.

The allegations described here are taken from the filing and remain unproven; no responsive pleading is reflected in the source document.

The allegations described here are taken from the filing and remain unproven; no responsive pleading is reflected in the source document.

David Brunk is a civil litigation attorney. He can be reached at david@newmanbrunk.com.