The Securities and Exchange Commission says a former advisor to the families of Army heroes defrauded them by making unauthorized trades and inappropriate investment recommendations.
It alleges that former Army financial counselor Caz L. Craffy defrauded grieving Gold Star family members and others between May 2018 and November 2022 by manipulating them to transfer benefits to brokerage accounts he managed outside his official army duties.
The regulator says that Craffy then used these funds for trading that was not authorized and did not match the investment objectives and risk profiles of the families. This exposed them to higher risks of loss from excessive trading, concentration and lack of diversification.
Fees and commissions charged to the families totaled more than $1.64 million, which the SEC says were mostly kept by Craffy, while the accounts he managed posted approximately $1.79 million in realized losses and faced additional unrealized losses of approximately $1.8 million.
One of cases included in the allegations was that Craffy misappropriated $50,000 from an IRA account of a minor child whose parent had died on active duty.
“Rather than help Gold Star families best use their survivor benefits, we allege that Mr. Craffy manipulated them to profit from their grief,” said Gurbir S. Grewal, director of the SEC’s Enforcement Division. “We owe an incredible debt of gratitude to these families who have sacrificed so much in service to our country. I am grateful to the SEC staff for holding Mr. Craffy accountable for his shameless conduct and delivering some measure of justice to these incredible families.”
The charges made against Craffy have not been proven in court.
The SEC’s complaint, which was filed in U.S. District Court for the District of New Jersey, charges Craffy with violating the antifraud provisions of the federal securities laws and Regulation Best Interest. The SEC is seeking permanent injunctions, disgorgement of allegedly ill-gotten gains, plus interest, and civil penalties.
On Friday, the Financial Industry Regulatory Authority Inc. announced it had expelled Monmouth Capital Management, a New Jersey broker-dealer with which Craffy was registered in 2021 and 2022, from the financial industry for repeatedly committing trading and disclosure misconduct in violation of Regulation Best Interest.
James Walesa “should have been barred from the industry years ago,” one attorney said.
Kristy Smith from Broadridge says advisors who can't adapt risk being left behind.
Three contenders stand out to replace the departed Erika McEntarfer, according to Hal Ratner, who is the head of research for Morningstar Investment Management.
Surveys show continued misconceptions and pessimism about the program, as well as bipartisan support for reforms to sustain it into the future.
With doors being opened through new legislation and executive orders, guiding clients with their best interests in mind has never been more critical.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
