Jury Finds Massachusetts Advisor Failed to Disclose Annuity Conflicts to Retirees
May 1, 2025 by Melanie Waddell
After a seven-day trial, a jury has found that investment advisor Jeffrey Cutter and his advisory firm, Cutter Financial Group, failed to disclose to their clients significant upfront commissions, among other conflicts of interest, as part of an annuity replacement scheme.
Wink’s Moore on the Market: Finally, a decision on the Cutter case.
The way I see this- you better be disclosing and documenting, if you are an insurance agent, who also does asset management.
A jury has found that investment advisor Jeffrey Cutter and his advisory firm, Cutter Financial Group, did not disclose to their clients “significant upfront commissions, among other conflicts of interest, as part of an annuity replacement scheme.”
The U.S. Securities and Exchange Commission alleged that Cutter and his firm recommended their advisory clients “invest in fixed indexed annuities that paid Cutter a large upfront commission without adequately disclosing his and CFG’s financial incentive to sell those products.”
Cutter requested that the case be dismissed, arguing that, among other things, “he was acting as an insurance agent and not as an investment advisor in these instances — and, thus, he did not violate the Investment Advisers Act of 1940.”
Nicolas Morgan, the founder of ICAN, said “by the SEC’s own admission, the Cutter case is about insurance products and a state-licensed insurance agent. The SEC has long sought—and long been denied—jurisdiction over insurance products such as fixed interest annuities (FIAs).”
Thank you, Melanie Waddell, at ThinkAdvisor! -sjm
