NAFA Advocates Against Regulatory Overreach in SEC v. Cutter Amicus Filing

Washington, DC, August 26, 2023 — NAFA, the National Association for Fixed Annuities, filed an amicus curiae temporary in the Securities and Exchange Commission v. Cutter Financial Group, LLC and Jeffrey Cutter lawsuit presently earlier than the U.S. District Court for the District of Massachusetts. NAFA’s temporary was filed in assist of the Defendants’ Motion to Dismiss and urges the court docket to dismiss the SEC’s allegations contained in its Amended Complaint towards Mr. Cutter and his registered funding advisory agency, CFG, because it pertains to the appliance of the Investment Advisers Act with respect to his and his RIA’s sale of fastened listed annuities.

NAFA’s temporary argues that the SEC’s utility of the Advisers Act on listed annuity transactions (1) depends on a flawed and unsupported studying of the Advisers Act that’s inconsistent with the framework of federal securities regulation because it pertains to insurance coverage versus securities issues; (2) contravenes the primacy accorded to state insurance coverage regulation as established underneath the McCarren-Ferguson Act, the Dodd-Frank Act and quite a few related Supreme Court choices; (3) is pointless given the safety of shoppers offered by in depth state regulation of insurance coverage; (4) infringes upon the jurisdictional authority of state regulators to realize a nationwide finest curiosity commonplace of conduct for annuity transactions; (5) runs afoul of the Major Questions Doctrine; and (6) injects useless uncertainty over disclosures and duties with respect to listed annuity transactions.

“For years, our business has confronted important threats to fastened listed annuity distribution. In Mr. Cutter’s case, the SEC’s makes an attempt at regulatory overreach merely go too far,” mentioned Chuck DiVencenzo, president and CEO of NAFA. “The sale of annuities is extremely regulated via a strong state-based framework, with elevated client protections because of the continued adoption of the National Association of Insurance Commissioners’ revised suitability rule, which holds annuity professionals to a finest curiosity commonplace. The conflation of insurance coverage and securities regulation solely stands to undermine an efficient regulatory regime that ensures client entry to the merchandise {and professional} recommendation Americans have to retire extra securely.”