SEC Launches “Sweep” Examination to Inquire into Sales Practices Applicable to Retirement Plans for Teachers, Broker-Dealers, and Third-Party Administrators

The SEC is allegedly trying to determine whether violations have occurred in the burgeoning 403(b) market.

The Sonn Law Group is investigating the SEC sweep of 403(b) Plans. If you or a family member has suffered losses investing, we want to discuss your case. Please contact us today for a free review of your case.

Beginning in June 2019, the SEC began sending letters to inquire into the sales practices applicable to retirement plans for teachers, broker-dealers, and third party administrators. The letters are from SEC examiners and include questions that seek details about compensation paid to reps since January 1, 2017.

The letters are especially for referring investors to specific investment options or companies, information and documents concerning how investors receive investment counseling, details regarding supervisory practices and documentation on sales abuses the firm has uncovered and addressed, and details and documents regarding any potential conflicts of interest the firm has uncovered and addressed. 

Teacher retirement plans or 403(b) plans are similar to 401(k) programs often offered by workplaces. However, participants are not protected by ERISA. Thus, the plans have been a dumping ground for investments with high fees and other costly riders such as surrender charges that often pay reps considerably more. Excessive fees make it more difficult for teachers to obtain an appropriate level of retirement income.

“Hopefully you do not get a letter and if you did not, you’re in an advantageous position to do a review of what policies and procedures you have in place, which should reveal if there are weaknesses and allow you to ferret out reps who are pushing the envelope,” Drinker Biddle partner James Lundy said. Lundy is a member of the firm’s SEC and regulatory enforcement team.

Contact Us Today

The Sonn Law Group is currently investigating the SEC sweep of 403(b) Plans. We represent investors in claims against negligent brokers and brokerage firms. If you or your loved one experienced investment losses, we are here to help. For a free consultation, please call us now at 866-827-3202 or complete our contact form.