08.21.23

SEC’s Lawsuit Is a Stretch to Regulate Insurance, Lawyer Says

by: Emile Hallez

The Securities and Exchange Commission (SEC) recently brought a complaint against investment advisory firm Cutter Financial Group and its owner Jeffrey Cutter, accusing them of failing to disclose commissions and churning annuities products. Cutter, who is also an insurance agent, allegedly steered clients to fixed index annuities while not disclosing the commissions he received from those products. The SEC also accused him of pushing clients toward new annuity contracts to generate additional commissions. Nick Morgan, a partner at law firm Paul Hastings, said the fact that the SEC is pursuing the case, rather than a state insurance commissioner, is problematic. "The SEC has for decades been trying to get jurisdiction over these insurance products, and it has passed rules that have been struck down, and has sought congressional authority to do it and been unsuccessful," Morgan said. "If they’re successful, the investors will have fewer choices when it comes to engaging in purchases of these products."

Read the full article on InvestmentNews