TIAA Settles SEC Charges for Violating Reg BI

Posted on March 21st, 2024 at 2:02 PM
TIAA Settles SEC Charges for Violating Reg BI

From the desk of Jim Eccleston at Eccleston Law 

The Teachers Insurance and Annuity Association of America (TIAA) has agreed to a $2.2 million settlement with the Securities and Exchange Commission (SEC) over allegations of violating Regulation Best Interest (Reg BI) in recommending investment options to clients opening individual retirement accounts (IRAs).

According to the SEC, TIAA's broker-dealer, TC Services, failed to inform IRA account holders about lower-cost options available to them, resulting in approximately 6,000 retail clients paying over $900,000 in combined expenses unnecessarily. AdvisorHub reports that TIAA offered two investment menus for IRAs: a pre-selected "core menu" and a "brokerage window" with broader and lower-cost choices. However, clients were not adequately informed about the brokerage window option, leading to the majority investing solely in core products.

The violations occurred from June 2020, when Reg BI was enacted, until November 2021. TIAA, without admitting or denying the findings, agreed to a censure, cease-and-desist order, and monetary penalties totaling $2.2 million, including disgorgement, prejudgment interest, and a civil penalty. Despite TIAA's remedial efforts and disclosure of the issue during an examination, the SEC emphasized the importance of complying with Reg BI and related obligations.

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

Tags: eccleston, eccleston law, sec

Return to Archive

TESTIMONIALS

Previous
Next

You were most helpful with my FINRA deposition. You are a good lawyer and a good person.

Dan B.

LATEST NEWS AND ARTICLES

February 4, 2026
Investor Redemptions Rise in Nontraded BDCs Amid Credit Concerns

Financial advisors and their clients have increased redemptions from nontraded business development companies (BDCs) following a series of high-profile corporate bankruptcies, according to InvestmentNews. The surge highlights growing investor concern about liquidity and credit exposure within these high-yield but often risky investment ...

February 3, 2026
FINRA Accuses Spartan Capital of Widespread Churning That Allegedly Harmed Customers

The Financial Industry Regulatory Authority (FINRA) has brought a disciplinary complaint against Spartan Capital Securities and several senior leaders of the New York City–based broker-dealer, alleging that the firm facilitated excessive trading that generated millions of dollars in revenue while causing substantial losses to customers.

February 2, 2026
California Investors Allege Unsuitable DST Recommendations in FINRA Arbitration

Two investors from the San Francisco Bay Area have filed a FINRA arbitration claim against brokerage firm Realized Financial and its financial advisors.