SEC Files Fraud Charges Against Brokers Targeting Federal Retirees

Elder fraud is becoming a significant concern of regulators, and firms. As the older population grows, so do the issues related to them and their money.

We have covered this topic before, and the SEC recently charged four former Atlanta-area brokers with fraudulently inducing federal employees to roll over holdings from their federal Thrift Savings Plan (TSP) retirement accounts into higher-fee, variable annuity products.

The SEC’s enforcement action comes at a time when the agency has been focusing more specifically on brokers’ and advisers’ interactions with senior investors, and others investing for retirement, through the ReTIRE initiative of the agency’s national exam program and the work of the Broker-Dealer Task Force in its Enforcement Division.

The SEC’s complaint alleges that the brokers misled investors concerning significant details about the recommended variable annuity investment, including the associated fees and guaranteed investment returns.  The brokers allegedly fostered the misleading impression that they were in some way affiliated with or approved by the federal government.  In some instances, investors were led to believe that their funds would be invested in a product that was offered, vetted, or specifically selected by the TSP.

According to the SEC’s complaint, the brokers sent investors incomplete or modified transaction forms as well as written materials they devised that obscured that the investment was a privately issued variable annuity with no connection to the TSP and would be processed through a private brokerage firm with which the brokers were associated.  The brokers sold approximately 200 variable annuities with a total face value of approximately $40 million to federal employees, who used monies rolled over from their TSP accounts to fund their purchases.

Source: SEC Files Fraud Charges Against Former Brokers Targeting Federal Retirees


The attorneys at Sallah Astarita & Cox, as former SEC Staff attorneys and broker-dealer lawyers, have extensive experience in all investment related disputes and regulatory matters. To speak to one of our attorneys, call 212-509-6544.