April 30 (Reuters) - U.S. securities regulators have charged a Utah-based retirement fund and its CEO with defrauding investors of millions of dollars and froze the fund's assets.
The U.S. Securities and Exchange Commission said American Pension Services Inc and its founder and CEO Curtis DeYoung lost more than $22 million of investor funds on high-risk investments.
"This misconduct jeopardized retirement security for thousands of APS customers," said Karen Martinez, director of the SEC's Salt Lake Regional Office.
According to the SEC, DeYoung's schemes targeted customers with retirement accounts holding assets typically not available through traditional 401(k) retirement plans or through other individual retirement accounts (IRA) custodians.
The SEC also alleged that investments in bankrupt ventures, including an office building in Wichita, Kankas, caused APS customers to lose more money.
APS concealed those losses and issued account statements that inflated the value of customer holdings, allowing APS to levy fees based on the full value of the holdings even when they were worthless.
Self-directed IRAs are an area of focus for the SEC, Andrew Ceresney, the agency's enforcement head, said on Wednesday at the Reuters Financial Regulation Summit in Washington.
The SEC is especially concerned, "given the lack of regulation in that area," Ceresney said.
Last year, the agency filed civil charges against an Indiana man who allegedly helped investors set up self-directed IRA accounts and gained control over their retirement assets, which he used to fund luxurious personal expenses and several start-up companies, the SEC said.
More enforcement cases are in the works, Ceresney said.
(Reporting by Avik Das and Suzanne Barlyn; Editing by Maju Samuel)
- Retirement Benefits