A recidivist investment advisor, who preyed on senior citizens, has been charged by the Securities and Exchange Commission with collecting millions of dollars in compensation without disclosing his history or the fees to clients, the SEC announced Thursday.
Keith Springer and his firm, Springer Investment Management, which was doing business as Springer Financial Advisors, defrauded hundreds of retail clients, most of them in or close to retirement,starting in January 2016, the SEC said. Springer is founder and CEO of the firm.
Springer Financial Advisors said Thursday in a statement it will challenge the SEC’s “attack on the Sacramento investment firm – saying the SEC has issued a death sentence for simple technical disclosures and procedural requirements that the firm corrected long ago or is working hard to correct.”
Springer promoted himself on his radio show, “Smart Money with Keith Springer” by saying he was sought out for the show because of his financial expertise when in fact he paid for the show to be broadcast in the Sacramento area, the complaint said.
The SEC said Springer and Springer Financial received millions of dollars in undisclosed compensation and other benefits for recommending certain investment products while claiming there was no conflicts of interest. The complaint did not specify the amount of the compensation.
He also went to great lengths to hide charges that the SEC filed against him and his firm in 2005 and his disciplinary history with the New York Stock Exchange. At that time, the SEC charged him with misrepresenting the performance of a hedge fund his firm managed by overvaluing its assets. In recent years, he hired internet search suppression consultants and instructed employees not to provide the information to prospective clients. He settled the earlier complaint without admitting guilt or innocence.
"Our 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 E. 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."
“The SEC wants to put us out of business for minor infractions and its horribly unfair,’’ Springer said in the statement. “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. Rather, they 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.’’
In a recent letter to the SEC, SFA’s (Springer Financial Advisors) said the SEC “failed to take into consideration SFA’s and Mr. Springer’s efforts to improve compliance, their exemplary record of client service, absence of credible customer complaints and the absence of serious misconduct in the record of this investigation.’’
“At worst,’’ the attorneys wrote, “Mr. Springer may have overlooked whether certain potential conflicts of interest were adequately disclosed, but there are no indications that Mr. Springer deliberately lied to or hid any data from his clients. Mr. Springer attempted to disclose any potential conflicts of interest and there is no evidence to suggest that he was attempting to deceive, manipulate or defraud his clients.’’
The SEC's complaint, filed in federal court in Sacramento, charges Springer and his firm 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.
The SEC has issued an investor alert warning investors about the role that radio programs can play in soliciting victims for investment schemes.