SEC Charges Recidivist Investment Adviser with Defrauding Retirees
Litigation Release No. 24695 / December 20, 2019
Securities and Exchange Commission v. Keith Springer and Springer Investment Management, Inc. dba Springer Financial Advisors, No. 19-cv-02559 (E.D. Cal. filed December 19, 2019)
The Securities and Exchange Commission charged Sacramento, California-based investment adviser firm Springer Investment Management, Inc. dba Springer Financial Advisors (SFA) and owner Keith Springer with defrauding hundreds of retail clients, most of them in or close to retirement.
The SEC's complaint alleges that Springer 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. 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.
The SEC's complaint, filed in the U.S. District Court for the Eastern District of California, charges Keith Springer with violating Sections 206(1), 206(2), and 207 of the Investment Advisers Act of 1940 ("Advisers Act"). The Complaint also charges Springer Financial Advisors with violating Sections 204, 206(1), 206(2), 206(4), and 207 of the Advisers Act and Rules 204-1, 204-2, 204-3, 206(4)-1(a)(5), and 206(4)-7 thereunder, and charges Keith Springer with aiding and abetting SFA's violations of these same provisions. The complaint seeks permanent injunctions from future violations of these provisions, disgorgement and prejudgment interest, and civil monetary penalties.
The SEC's investigation was conducted by Sallie S. Kim and supervised by Monique C. Winkler in the San Francisco Regional Office. The SEC's litigation will be led by Sheila E. O'Callaghan, Bernard B. Smyth, and Ms. Kim. A related SEC examination led to the investigation and was conducted by Kenneth P. Schneider, Erica R. Gould, Steven R. Wolz, Benjamin Yu, and Matthew M. O'Toole of the San Francisco Regional Office.