Judge sides with SEC in allowing disputed witnesses in Cutter case
March 4, 2025 by John Hilton
A Massachusetts judge will allow the Securities and Exchange Commission to call five disputed witnesses in an upcoming trial over annuity sales by advisor Jeffrey Cutter.
Cutter had accused the SEC of trying to ambush his defense by adding five surprise witnesses and “entirely new theories of liability” just weeks before the April 14 trial date.
In March 2023, the SEC filed charges against Jeffrey Cutter and his advisory firm, Cutter Financial Group for “recommending that their advisory clients invest in insurance products that paid Cutter a substantial up-front commission without adequately disclosing Cutter’s and CFG’s financial incentive to sell the products.”
Wink’s Moore on the Market: John Hilton with InsuranceNewsNet is giving us the latest on the Cutter lawsuit.
You will recall that this case asserts that Jeffrey Cutter did not notify his clients of financial incentives to recommend annuities, over investments.
Interesting commentary:
“[An expert witness] opined, among other things, that each annuity purchased by Named Clients was suitable and that Mr. Cutter’s sales process was consistent with insurance industry standards,” the memo says.
Likewise, defense attorneys retained [another expert witness], an MIT-trained economist. He examined the allegedly improper annuity replacements cited by the SEC and ‘opined, among other things, that at the time of the switch, Mr. Cutter could have reasonably expected that the replacement annuity would provide greater opportunity for growth (with no change in risk) and that the products … performed consistently with that expectation.’
This expert found that ‘Client G’ made money on his annuity while ‘Client H’ was financially better off with the fixed indexed annuity that Cutter sold her than if she had stayed with the variable annuity that she previously owned, the memo says.” -sjm
