“Cody also sent clients fabricated tax forms which purported to show retirement account distributions and tax withholding in order to disguise the fact that the clients’ accounts were essentially empty,” the SEC said.
Cody allegedly continued to hide retiree client losses by making wire transfers of monthly deposits to the retirees' bank accounts and sending the clients fabricated tax forms. “These deceptive acts caused Cody's clients to believe that their retirement savings were secure when, in fact, they were not,” the SEC said.
The court, which previously ordered a preliminary injunction and an asset freeze against Cody and his Boston Investment Partners LLC, granted the SEC's motion for summary judgment and found that Cody violated antifraud provisions of the Investment Advisers Act and the Securities Exchange Act.
"The sheer duration of Cody's deception deprived these clients of any opportunity to take measures to decrease or to stop their losses or even to work longer to make up those losses, With their prime working years now well behind them, Cody's deceptive scheme has irreparably damaged their financial security, causing immense anxiety and fear and creating the real possibility that they may suffer further dire consequences,” the SEC said.