Caz L. Craffy

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 26363 / July 29, 2025

Securities and Exchange Commission v. Caz L. Craffy, No. 3:23-cv-03639 (D.N.J. filed July 7, 2023)

SEC Obtains Final Judgment Against Former Army Financial Counselor Who Defrauded Gold Star Family Members

On September 4, 2024, the Securities and Exchange Commission obtained a judgment against defendant Caz L. Craffy, whom the SEC previously charged with defrauding Gold Star family members and others by engaging in unauthorized trading in customer accounts and recommending excessive trades and high-risk strategies that did not match customers’ investment profiles. In a parallel criminal proceeding, United States v. Craffy, Crim. No. 23-541 (D.N.J.), on August 22, 2024, Craffy was sentenced to 151 months in prison followed by 3 years of supervised release and ordered to pay $1,482,741.41 in forfeiture, and on January 7, 2025, he was ordered to pay $4,085,988.32 in restitution. In light of Craffy’s sentence, forfeiture, and restitution in the parallel criminal proceeding, on July 14, 2025, the SEC advised the Court that it does not intend to pursue its remaining monetary claims against Craffy, which the Court ordered on July 16, 2025. This concludes the SEC’s litigation in this matter.

According to the SEC’s complaint, Craffy was permitted to provide general financial education to service members’ families through his job as a U.S. Army financial counselor. However, as alleged, between May 2018 and November 2022, Craffy directed grieving family members to transfer their benefits into brokerage accounts he managed while working full-time for private brokerage firms. Once the funds were transferred, Craffy allegedly engaged in unauthorized and excessive trading that exposed his customers to higher risks of loss, resulting in realized losses of approximately $1.79 million, including approximately $1.64 million in fees and commissions, most of which were paid to Craffy personally. 

The complaint charged Craffy with violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rules 10b-5 and 15l-1(a)(1) thereunder.

The SEC's litigation was handled by Hayden M. Brockett, Bari R. Nadworny, Ariel Atlas, and Liora Sukhatme, and was supervised by Sheldon L. Pollock and Jack Kaufman, all of the New York Regional Office.