A California financial adviser and radio host allegedly defrauded mom and pop investors out of millions of dollars while paying outside consultants to cover up online reports of his past misconduct, the Securities and Exchange Commission charged Friday.
Keith Springer, owner of Springer Investment Management and host of “Smart Money with Keith Springer” on a Sacramento radio station, was charged in the U.S. District Court for the Eastern District of California of fraudulent conduct, breaches of fiduciary duty, and a pattern of deceptive conduct.
But Springer, 55, called the charges “horribly unfair” and compared himself to David fighting Goliath in a statement to MarketWatch. “The SEC wants to put us out of business for issues that were fixed long ago,’’ he said in an email. “I’m just an easy target for them. They know I don’t have the resources to fight them properly. Now I know how David felt as the giant Goliath was charging at him.’’
The SEC says Springer “specifically targeted retirees and near-retirees,” and “unsophisticated individual investors over 55,” and allegedly defrauded them of millions through undisclosed commissions, fees and other benefits.
The agency says he presented himself as a financial “expert” who had been recruited to run a financial radio show because of his knowledge, but in reality, he was allegedly paying the radio station to broadcast the show.
And it says he claimed to be a “Qualified Retirement Advisor,” when there is no such designation, and used faked Forbes and Money Magazine logos to claim falsely that his articles had been published in the magazines.
The financial adviser, 55, also had a record of misconduct which he allegedly paid outside consultants to hide on the internet, the SEC says. Springer was censured by the New York Stock Exchange in 1999 and barred from membership for four years, and was hit with a cease-and-desist order by the SEC in 2005, according to the SEC.
Since 2014 Springer has allegedly pocketed at least $6 million in hidden compensation by allegedly shunting clients into high-cost annuities in return for hidden commissions as high as 7% of the purchase price, as well as other benefits, according to the SEC’s latest complaint. In recent years he has also allegedly charged clients as much as 2% a year for managing their money, while moving the funds into investments managed by a third party that charged just 0.35%, it adds.
In response, Springer says he was guilty of nothing more than oversight and poor record-keeping. “We failed to make adequate disclosures about potential conflicts of interest and failed to fully comply with certain process and record-keeping regulations,” he said, but these were “all conduct we have corrected or are in the process of correcting.”
He denied any misappropriation of funds, said he had not deliberately misled investors, and that there had been no client complains. “At worst…Mr. Springer may have overlooked whether certain potential conflicts of interest were adequately disclosed,” his lawyers told the SEC in a letter.