The Securities and Exchange Commission has charged investment advisor and radio host Keith Springer and his firm Springer Investment Management Inc., dba Springer Financial Advisors, with defrauding hundreds of retail clients, most of them in or close to retirement.
According to the SEC complaint, Springer, 55, and SFA received millions of dollars in undisclosed compensation and other benefits for recommending certain investment products while claiming that they did not have any conflicts of interest.
The firm is based in Sacramento, California.
According to the complaint, many clients learned of Springer through his radio show, “Smart Money with Keith Springer,” and Springer misled prospective clients into believing he was selected to host the show because of his industry expertise.
In reality, SFA paid to broadcast the show.
The SEC’s complaint further alleges that Springer went to great lengths to hide prior charges by the SEC and his disciplinary history with the New York Stock Exchange, hiring internet search suppression consultants and instructing employees not to provide the information to prospective clients.
“Defendants’ deceptive conduct continued after clients retained SFA,” the complaint states. “In particular, Springer and SFA recommended to clients, or directed client funds into, certain investments in order to obtain payment of millions of dollars in compensation and the provision of other economic benefits for themselves without disclosing those incentives to their clients.”
The SEC’s “complaint alleges that Springer actively targeted vulnerable retirees by misleading them about his prominence in the industry and promising to act in their best interests,” said Erin Schneider, director of the SEC’s San Francisco Regional Office. “Investment advisers must be truthful about their background and fully disclose all conflicts of interest.”
Springer told ThinkAdvisor in a Friday email that he plans to challenge the SEC charges.
“The SEC wants to put us out of business for minor infractions and it’s horribly unfair,’’ Springer said. “I take my fiduciary responsibility very seriously. And after years of reviewing our practices, the SEC found absolutely nothing serious: no misappropriation of client funds, no lies about our investments, no client complaints, no falsehoods about our performance. Nothing!”
The SEC, Springer continued, said “we failed to make adequate disclosures about potential conflicts of interest and failed to fully comply with certain process and record-keeping regulations – all conduct we have corrected or are in the process of correcting.’’
The SEC’s complaint, filed in federal court in Sacramento, charges Springer and SFA with violating the antifraud provisions of the federal securities laws as well as SEC rules concerning advertisements, compliance, required disclosures, SEC reporting and recordkeeping. The SEC is seeking injunctions, disgorgement of allegedly ill-gotten gains, and civil penalties.
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