SEC Wants to Protect Teachers, Military Members from Getting Duped

The Securities and Exchange Commission (SEC) this week announced it is implementing preventative measures that protect teachers and military service members from falling victim to securities fraud and other related misconduct, as part of SEC Chairman Jay Clayton’s promise to “protecting the most vulnerable market participants.”

“My colleagues and I are particularly focused on ensuring that our teachers, veterans, and active duty military, who often leave financial planning to others, know the financial services they are getting, what they are paying for those financial services, and to call us if something doesn’t seem right,” Clayton said in a prepared remark.

There were approximately 230 instances of securities fraud in the United States in fiscal year 2017, according to the United States Sentencing Commission’s latest report on the issue. That number fluctuated between 221, 218, 237, and 282, for each respective year prior.

The office found that the median loss for these offenses was approximately $2.1 million; 36% of these fraud offenses involved losses greater than $3.5 million, and 21.5% of the offenses involves losses of $550,000 or less.

Coined the Teachers’ Initiative and the Military Service Members’ Initiative, the overall program will be spearheaded by the SEC Enforcement Division’s Retail Strategy Task Force, which will focus on outreach efforts to these employees to enhance their knowledge on general concepts regarding saving money for retirement, investment fees, and retirement programs tailored to individuals in their areas of work.

“The Enforcement Division is committed to fighting for our country’s educators, service members, and veterans, who may be vulnerable to fraud in the securities markets,” Steven Peikin, co-director of the SEC’s Enforcement Division, said in a statement.

“Teachers and members of the military community have already made tremendous financial sacrifices for our country and can quickly face financial ruin as the result of securities fraud,” added Stephanie Avakian, co-director of the SEC’s Enforcement Division.

The agency already has an aid program for teachers. The Teacher Investment Outreach program offers tools and resources to help educators learn about 403(b) and 457(b) retirement plans that are offered in most public school districts. The new initiative will complement this by helping to ensure these retirees don’t fall victim to securities fraud.