SEC Obtains Judgment Against Former Massachusetts-Based Investment Adviser Charged with Defrauding Retirees
Litigation Release No. 24739 / February 18, 2020
Securities and Exchange Commission v. Richard G. Cody, et al., No. 16-cv-12510 (D. Mass.)
On December 23, 2019, a federal district court in Massachusetts entered a final judgment against Richard G. Cody, a former investment adviser and broker representative who defrauded Massachusetts retirees.
According to the SEC's complaint, filed on December 12, 2016, Cody defrauded at least three of his retired clients over a twelve-year period by concealing extensive losses in the investors' retirement accounts, which were being rapidly depleted. Cody concealed these losses by leading the clients to believe that their investments were maintaining steady value and that the clients were living off income from their investments.
The court, which previously ordered a preliminary injunction and an asset freeze against Cody and his company, Boston Investment Partners LLC, granted the SEC's motion for summary judgment and found that Cody violated the antifraud provisions of Section 206(2) of the Investment Advisers Act of 1940 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5(c) thereunder. The court permanently enjoined Cody from violating those provisions and Section 206(1) of the Advisers Act and ordered Cody to pay disgorgement of $14,171 plus pre-judgment interest of $3,490. The SEC moved to dismiss relief defendant Boston Investment Partners from the action on February 14, 2020.
On November 9, 2018, Cody pleaded guilty to criminal charges brought by the U.S. Attorney for the District of Massachusetts, in a case arising from the same conduct alleged in the SEC's complaint. On March 7, 2019, Cody was sentenced to two years of imprisonment and ordered to pay a $10,000 fine.
(December 13, 2016), and 24349 (November 13, 2018).