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U.S. Securities and Exchange Commission

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 23702 / December 13, 2016

Securities and Exchange Commission v. Richard G. Cody, et al., Civil Action No. 16-cv-12510-FDS (D. Mass., filed Dec. 12, 2016)

SEC Charges Investment Adviser with Defrauding Massachusetts Retirees

The Securities and Exchange Commission announced today that on December 12, 2016, it filed a complaint in federal court in Boston charging investment adviser and broker representative Richard G. Cody, a former resident of Massachusetts and current resident of New Jersey, with defrauding his retired clients. The Commission has asked the court to consider whether to impose certain preliminary relief against Cody and his company, Boston Investment Partners, LLC, including an asset freeze.

The SEC's complaint alleges that Cody defrauded at least three of his retired clients over a twelve-year period by concealing the fact that their retirement accounts had suffered extensive losses. According to the SEC's complaint, the clients did not know that their accounts had lost substantial value and were being rapidly depleted. Cody concealed these losses by leading the clients to believe that their investments were maintaining steady value and that the clients were living off income from their investments. By 2014, two of the retirees' accounts had essentially run out of funds. Cody allegedly continued to hide that the retirees' money was gone by making wire transfers of monthly deposits to the retirees' bank accounts and sending the clients fabricated tax forms. The SEC alleges that these deceptive acts caused Cody's clients to believe that their retirement savings were secure when, in fact, they were not.

The SEC's complaint alleges that Cody violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940 and seeks disgorgement of ill-gotten gains plus interest and penalties as well as permanent injunctive relief. The SEC also seeks a court-ordered asset freeze against Cody and Boston Investment Partners, which was named as a relief defendant, a temporary restraining order, and a detailed accounting of Cody's assets.

The SEC's investigation was conducted by Alicia M. Reed, John McCann, Amy Gwiazda, Richard Harper and Louis Randazzo of the SEC's Boston Regional Office. The litigation will be led by Mr. Harper. The SEC's investigation is continuing.

The SEC acknowledges the assistance of FINRA in this matter.

SEC Complaint

 

http://www.sec.gov/litigation/litreleases/2016/lr23702.htm


Modified: 12/13/2016