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Equity Funding Corporation of America (EFCA)

EFCA is a Los Angeles-based holding company. In 1960, Equity Funding Corporation of America was founded by four individuals who assumed equal partnership interests in the firm. Two of the partners soon resigned, leaving the small company to Stanley Goldblum, who is the CEO, and Michael Riordan, who served as chairman of the board. Equity Funding’s principal line of business was selling life insurance policies and “funding programs” that merged life insurance and mutual funds into one financial package for investors. The deal was as follows… 1) First, the customer would invest in a mutual fund; 2) Second, the customer would select a life insurance program; 3) Third, the customer would borrow against the mutual fund shares to pay each annual insurance premium. 4) Finally, at the end of ten years, the customer would pay the principal and interest on the premium loan with any insurance cash values or by redeeming the appreciated value of the mutual fund shares. 5) Any appreciation of the investment in excess of the amount paid would be the investor's profit. Developing creative financial investments was a trademark of Equity Funding throughout its existence. After going public in 1964, Equity Funding quickly gained a nationwide reputation as one of the most innovative companies in the ultraconservative life insurance industry. EFCA was responsible for one of the largest corporate frauds in American History that the story of it is dramatized in the BBC Horizon programme the BILLION DOLLAR BUBBLE!...