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Wellfund (Canopy Financial) HSA Bankruptcy

About this site

I started this website 01Jan2010, to share information with other people hoping to get their money back from HSA accounts with Wellfund (aka Canopy).


I'm just an account holder who's money is tied up and who wants to know what's going on. I am not a lawyer, this is not legal advice. I am not an accountant, this is not financial advice. Your mileage may vary, etc.


I have a Health Savings Account with Wellfund (www.wellfund.com), which is adminstered by Canopy Financial Inc., a Delaware Corporation headquartered in Chicago IL. As of December 1, 2009 Canopy declared bankruptcy, the accounts are frozen, and money in the accounts is unavailable. The Securities and Exchange Commission alleges fraud. I'm trying to figure out whether anyone is trying to recover the funds of the HSA account holders.

Paragraphs with a yellow background are recent additions.


Being self-employed (sensicomm.com), I pay a lot of money for health insurance. So in 2006 my wife and I switched to a high deductible health plan, which allowed her to have a Health Savings Account. After a lot of research, we chose the Wellfund HSA. Wellfund claimed to be efficient, low-overhead, FDIC-insured, and conservative (fixed-income money market type investments). And it worked out well: low but consistent earnings on the funds, easy funds transfer in and out of the account, and only a couple of glitches related to the website operation - which were resolved quickly by telephone support personnel.

And everyting was fine until December 1, 2009. Then, Canopy Financial Inc. declared bankruptcy. I can log in and see my account, but it is no longer possible to access the funds.

The Securities and Exchange Commission (sec.gov) announced on December 2, 2009 that it had filed fraud charges against Canopy Financial and its co-founder. They claim a "falsified audit report" and "bank and financial statements with false and misleading information". The SEC press release is available the SEC website at www.sec.gov/news/press/2009/2009-257.htm, and the actual complaint is online in PDF format at www.sec.gov/litigation/complaints/2009/canopy113009.pdf

Some interesting tidbits from the allegations in the complaint [numbers in brackets are paragraph numbers in the document]:

Overall, this SEC document appears to be concerned with the investors that purchased Canopy stock. I don't see anything about trying to recover the funds in the client accounts. I hope I'm wrong about that.

I haven't seen any numbers on the total amount in client accounts. If we assume an average of 1/2 year of contributions in each account, that would be about $2000 each or $160million total. Obviously, that's a wild guess: the actual amount could be much less or much more.


My December account statement has the following notice:

The account statement shows an accounting balance, not a cash balance. As previously reported to you, although all funds for Health Savings Accounts were supposed to be held in custodial bank accounts, a substantial amount of these funds were misappropriated and are now missing.

On December 30, 2009 Canopy's Chaper 11 bankruptcy case was converted to a Chapter 7 bankruptcy, and a Chapter 7 trustee was appointed. The Chapter 7 trustee is continuing to operate Canopy's remaining business and is attempting to recover assets for the benefit of creditors of Canopy Financial, including the Health Savings Account holders.

For up to date information, please refer to our customer information hotline (877)215-8909.

On February 2, 2010 I called the hotline and got a "number not working" error message.

What other people are doing

A group "Canopy Financial HSA Fraud Discussion" has been formed on FaceBook: www.facebook.com/group.php?gid=213377669822.

Other resources exist. To be added.

My research


Notation from a Wellfund statement saying that the account is insured by the FDIC The Wellfund statements have this printed line indicating that accounts are covered by the FDIC.

I submitted a query to the FDIC (the Customer Assistance Online Form on the FDIC.gov homepage), asking whether the account is in fact FDIC insured. The text of the letter is here:fdic-email-091231.html.

My (non-lawyer) impression from the letter is that the accounts should be FDIC-covered for most people, but Canopy is just a broker, and the FDIC insurance would apply to the actual bank account the funds are being held in. No documentation I currently have says where the funds are actually held.


I also queried the Securities and Exchange Commission, to ask whether they are doing anything to recover the funds of the account holders. The reply email was basically a rehash of the press release: my interpretation is that they are only working to protect the large investors.


I contacted both of my Senators, and Senator Jeanne Shaheen's office called to say that she has contacted the FDIC and is escalating the query to the Comptroller of the Currency. If you live in the Granite State (New Hampshire), I suggest you contact her office to let them know you are affected also. There's a contact form on her official website.


Comments about this page can be posted to my personal blog at noise-blog.sensicomm.com/2010/01/hsa-bankruptcy.html

Page History

2010-01-01Page started.
2010-01-04First content added.
2010-02-02Add Chapter 7 note, SEC and Senator contacts.