Ary Rosenbaum - The Rosenbaum Law Firm P.C.

The U.S. Securities and Exchange Commission (SEC) announced that TIAA-CREF Individual & Institutional Services LLC, (TC Services) that is a subsidiary of Teachers Insurance and Annuity Association of America (TIAA), will pay $97 million to settle charges of making inaccurate and misleading statements to rollover clients.

The settlement also covers allegations that the firm failed to adequately disclose conflicts of interest to thousands of participants in TIAA record kept employer-sponsored retirement plans.

According to the investigation, customers were pressured by TIAA advisers to move their investments from low-cost, employer-sponsored retirement plans to higher-cost, individually managed accounts. The individual advisory program offered was significantly more expensive than the employer-sponsored plans.

The SEC also said that TIAA’s sales representatives presented clients with a “biased and misleading comparison” of their investment options, promoting managed accounts as the only alternative to self-directed investments while downplaying the benefits of keeping their money in employer-sponsored plans.

When you’re a plan provider, you must tread carefully and it’s clear that TIAA didn’t.

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