Jury Finds Cutter Financial Group Liable for Disclosure Failures in Annuity Sales

Posted on June 4th, 2025 at 3:50 PM
Jury Finds Cutter Financial Group Liable for Disclosure Failures in Annuity Sales

From the desk of Jim Eccleston at Eccleston Law

A federal jury in Massachusetts has found investment advisor Jeffrey Cutter and his firm, Cutter Financial Group, liable for failing to disclose significant commissions and conflicts of interest tied to an annuity replacement strategy sold to clients.

According to ThinkAdvisor, the jury deliberated for five hours before determining that Cutter and his firm violated Section 206(2) of the Investment Advisers Act of 1940. This provision prohibits any transaction, practice, or business course that operates as a fraud or deceit on a client or prospective client. The Securities and Exchange Commission (“SEC”) alleged that Cutter and his firm recommended fixed indexed annuities that paid large upfront commissions without adequately disclosing the firm’s financial incentives.

While the jury held the defendants accountable for failing to disclose these material conflicts, it found in Cutter’s favor on other claims brought under Sections 206(1) and 206(4), which are the anti-fraud provisions of the Advisers Act. The verdict partially vindicated Cutter’s argument that the firm did not intentionally or recklessly defraud its clients, nor did it violate SEC rules related to compliance policies and procedures.

The case has drawn industry attention, according to ThinkAdvisor. Advocacy groups such as the National Association for Fixed Annuities and Investor Choice Advocates Network (ICAN) filed amicus briefs supporting Cutter. ICAN’s founder, Nicolas Morgan, told ThinkAdvisor that the verdict warrants scrutiny, cautioning against regulatory overreach that could impose costly, unnecessary burdens on financial professionals and limit investor choices.

Cutter Financial Group announced plans to launch new educational initiatives aimed at helping clients better understand commission structures and potential conflicts of interest in financial transactions. ThinkAdvisor reports that the case may be appealed.

 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law

Return to Archive

TESTIMONIALS

Previous
Next

Fantastic news!!!!  Your professionalism, support and expertise were greatly appreciated.  You made a difficult situation much more bearable.

Marci M.

LATEST NEWS AND ARTICLES

December 22, 2025
FINRA Overhauls Arbitration Rules to Rebalance Arbitrator Selection and Codify Forum Practices

The Financial Industry Regulatory Authority (FINRA) has approved significant amendments to its Codes of Arbitration Procedure designed to rebalance public arbitrator selection, increase transparency, and formalize several long-standing practices in the arbitration forum.

December 19, 2025
Industry Groups Press Senate at Advance Financial Exploitation Prevention Act

Several industry associations are urging the U.S. Senate to pass the Financial Exploitation Prevention Act, legislation that would allow mutual fund companies and their transfer agents to delay redemptions when they reasonably suspect elder financial abuse.

December 18, 2025
UBS Warns of Rising Default Risk in Private Credit

A UBS report signals that credit stress likely will intensify next year as borrowers confront inflation, elevated interest costs, and softening consumer conditions.