Fraud Alert: SEC Brings Charges Against Former Brokers Targeting Retired Federal Workers
On July 31st, 2017, the Securities and Exchange Commission (SEC) announced that it was bringing fraud charges against four Atlanta, Georgia-area brokers who have been accused of exploiting federal retirees. These brokers collectively operated a company called Federal Employee Benefits. Here, our experienced Florida elder financial abuse attorney discusses these charges that have been brought by the SEC.
What You Need to Know About the Fraud Scheme
According to the SEC, the four Atlanta-based brokers were attempting to get federal workers to roll over the holdings held within their Thrift Savings Plan (TSP) retirement accounts, to complex, high-cost variable annuities. SEC officials contend that these former brokers, through their company Federal Employee Benefits Counselors, intentionally targeted federal workers who were at or near their retirement age, and who had a substantial amount of money invested in their TSP retirement account. Many different material misrepresentations were made to the company’s actual and prospective investors. Specifically, Federal Employee Benefits Counselors misled investors by:
- Failing to disclose that they had very high fees;
- Incorrectly suggesting that returns would be guaranteed;
- Not actually making it clear that the product they were selling was a variable annuity; and
- Wrongfully implying that their product was directly approved by the federal government.
The reality was far different. Not only were the variable annuities that they were offering not approved or connected to the federal government in any form, but these products were wholly unsuitable for many of the investors. In all, federal workers purchased more than $40 million worth of annuities from the company, allowing the brokers to rake in nearly $1.8 million in fees.
The SEC Is Putting More Focus on Protecting Senior Investors
In this case, SEC officials believe that federal employees over the age of 59 were explicitly targeted for abuse. The enforcement action fits into a broader pattern, in which the agency is now taking a close look at broker and brokerage firms and their interactions with elderly investors. Simply put, there are serious concerns that unscrupulous brokers are currently taking advantage of elderly investors at a disproportionate rate. To try to stop any fraud schemes similar to this one, the SEC has put out an official Investor Alert, warning the public that people with federal retirement benefits are at risk of becoming targets for fraud. If you or a loved one is a federal worker at or near retirement age, please be very careful when investing.
Contact Our Florida Financial Advisor Stock Broker Abuse Lawyer Today
If you or your elderly loved one has been the victim of financial fraud, abuse or exploitation, our firm is standing by ready to help. Our top-rated securities fraud attorney Gregory Tendrich has helped many securities fraud victims recover full and fair compensation for their financial losses. For immediate assistance with your claim, please contact us today at 561-475-1332 to schedule your free case evaluation. We serve clients throughout Florida, including in Boca Raton, West Palm Beach, Delray Beach, Vero Beach and Port St. Lucie.