The US Securities and Exchange Commission (SEC) has asked a federal court for permission to issue subpoenas in connection with post-trial comments made by Cutter Financial Group LLC and its principals, following a split jury verdict earlier this year in an enforcement case over alleged violations of the Investment Advisers Act.
The SEC initially filed the case in March 2023 in the US District Court for the District of Massachusetts, claiming that the firm directed clients toward specific insurance and annuity products while failing to disclose financial incentives tied to those sales, in breach of its fiduciary responsibilities as investment advisers.
According to the SEC’s complaint, Cutter Financial and co-owner Jeffrey Cutter allegedly received approximately $9.34 million in commissions related to 580 annuity sales between 2014 and 2022.
In April, a jury found Cutter Financial liable for negligence but did not conclude that the firm had acted with intent to defraud. The panel also found the SEC did not meet its burden on a third claim, which alleged the company failed to implement written policies designed to prevent violations of the Advisers Act.
The SEC is now seeking to examine whether the company and its owners made inaccurate or misleading statements following the verdict. According to court filings, the agency is focusing on a press release issued the day after the jury's decision, as well as comments made on social media.
The press release, titled “Jury Clears Cutter Financial Group,” included a photo of co-owner Jeff Cutter under a caption stating he was “Cleared by Jury.” The SEC said those representations were incorrect because the jury returned a negligence finding against the firm.
As of the time of writing, the original press release can no longer be found online.
In a separate social media exchange, a user also praised Cutter Financial and commented that the SEC received “its due punishment.” Jeff Cutter responded to the message by thanking the commenter and writing “truth prevails,” without referencing the jury’s finding of negligence.
Meanwhile, Cutter Financial is opposing the subpoena request, arguing that it lacks procedural foundation and does not meet the requirements for civil discovery. The firm contends that the SEC has not identified specific targets, documents, or subjects for the potential depositions and instead is relying on general suspicions.
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