Recently the Securities and Exchange Commission (SEC) charged California investment adviser Keith Springer and his firm Springer Investment Management Inc with defrauding hundreds of his clients by failing to disclose compensation and benefits they received for recommending specific investment products all the while claiming that they did not have any conflicts of interest.  Many of Springer’s clients came to him through his radio show “Smart Money with Keith Springer.”  Springer represented to his clients that he was chosen to host the radio show because of his expertise when in fact, Springer Investment Management paid the radio station to have his show broadcast over the radio.  In addition, the SEC alleges that Springer hired internet search suppression consultants to hide prior charges brought against him by the SEC as well as his disciplinary history with the New York Stock Exchange (NYSE).  In 1999 the NYSE and the SEC barred him four for four years for “improper conduct that benefited him personally to the detriment of his clients.”  According to Erin E. Schneider of the SEC describing the new charges, “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.”

The SEC alleges that Springer convinced his clients to sell investments in their present retirement accounts to buy annuities through him.  The SEC also alleges that he also convinced his clients to sell already owned annuities and incur significant surrender fees and then buy new annuities from him.  The SEC also alleges that Springer failed to inform his clients of conflicts of interest in these actions and that Springer was receiving far greater commissions personally through this strategy than if he had recommended other investments to his clients.


Before investing with anyone, you should investigate the person offering to sell you the investment with the Securities and Exchange Commission’s Central Registration Depository.  This will tell you if the broker is licensed and if there have been disciplinary procedures against him or her.  You can also check with your own state’s securities regulation office for similar information.  Many investment advisers will not be required to register with the SEC, but are required to register with your individual state’s securities regulators.   You can find your state’s agency by going to the website of the North American Securities Administrators Association. Many investment advisers will not be required to register with the SEC, but are required to register with your individual state securities regulators.  You should also check with the Financial Industry Regulatory Authority (FINRA) for information about the particular  investment adviser.

It is also important to remember that you should never  invest in something that you do not completely understand.  This was a mistake that many of Bernie Madoff’s victims made.Annuities are a legitimate investment, but are both quite complicated and not appropriate for everyone which is why you should make sure that you understand all of the details of an annuity before buying or surrendering one.  You also may want to check out the SEC’s investor education website at  Scammers can be very convincing and it may sound like there is a great opportunity for someone to make some money, but you must be careful that the person making money is not the scam artist taking yours. Additionally, investing with someone merely because you trust them because you have heard them on the radio or television is dangerous.

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