SEC v. Cutter Financial Group, LLC and Jeffrey Cutter - Investment Adviser Fiduciary Duty Breaches

SEC Litigation Releases

Filed February 10th, 2026

Detected February 20th, 2026

Summary

The SEC announced a final judgment against investment adviser Jeffrey Cutter and Cutter Financial Group, LLC for breaches of fiduciary duties. The judgment orders civil penalties totaling $150,000 and requires client notification and injunctions against future violations.

View original document View source feed page

What changed

The U.S. District Court for the District of Massachusetts entered a final judgment against investment adviser Jeffrey Cutter and his firm, Cutter Financial Group LLC, ordering them to pay a combined civil penalty of $150,000 ($100,000 for the firm, $50,000 for Cutter). The judgment stems from a jury verdict finding that the defendants violated Section 206(2) of the Investment Advisers Act of 1940 by selling fixed index annuities to advisory clients without adequate disclosure of their financial incentives. The court also enjoins Cutter and CFG from future violations for five years and requires them to provide copies of the judgment to all existing and new clients for five years.

Investment advisers and advisory firms must review their disclosure practices regarding product recommendations, particularly when financial incentives are involved. Compliance officers should ensure that all conflicts of interest are adequately disclosed to clients. The requirement to provide judgment copies to clients for five years necessitates robust client communication protocols. Failure to comply with these requirements or future violations could result in further enforcement actions and penalties.

Source document (simplified)

Cutter Financial Group, LLC and Jeffrey Cutter

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 26485 / February 19, 2026

Securities and Exchange Commission v. Cutter Financial Group, LLC and Jeffrey Cutter, No. 3:23-cv-10589 (D. Mass., filed Mar. 17, 2023)

Court Enters Final Judgment Against Investment Adviser and Advisory Firm for Breaches of Fiduciary Duties in Annuity Sales to Advisory Clients

On February 10, 2026, the U.S. District Court for the District of Massachusetts entered a final judgment against Massachusetts-based investment adviser Jeffrey Cutter and his advisory firm, Cutter Financial Group LLC (“CFG”). The judgment orders CFG to pay a civil penalty of $100,000 and orders Cutter to pay a civil penalty of $50,000. The judgment requires Cutter and CFG to provide a copy of the judgment to all of their existing investment advisory clients and to all of their new investment advisory clients for a period of five years, and enjoins Cutter and CFG from future violations of Section 206(2) of the Investment Advisers Act of 1940 (“Advisers Act”) for a period of five years.

The entry of the final judgment follows an April 23, 2025 jury verdict after a seven day trial on the SEC’s allegations that Cutter and CFG violated Sections 206(1), 206(2) and 206(4) of the Advisers Act and Rule 206(4)-7 thereunder by, among other things, selling insurance products called fixed index annuities to their advisory clients without adequate disclosure of their financial incentive to recommend fixed index annuities over other investment options. The jury found the defendants liable for violating Section 206(2) of the Advisers Act and found for the defendants on the SEC’s claims alleged under Sections 206(1) and 206(4) of the Advisers Act and Rule 206(4)-7 thereunder.

The SEC’s litigation was handled by Amy Burkart and David Fox of the Boston Regional Office.