This makes me angry and sad at the same time. The SEC announced that it has shut down American Pension Services, a pension administrator in Utah.
The principal of APS was investing customer money in stuff that he shouldn’t have. These are retirement funds! I’m mad because this guy clearly didn’t care what he was doing to people. I’m sad because the victims will really be hurt.
I sit as the chairperson of the Police Pension Fund for the Town of Jupiter. It is worth over $50 million dollars. First of all, it wouldn’t be smart for anyone to steal from cops, they are armed after all (kidding). But it is a very serious business. I just can’t imagine someone who has been entrusted with people’s retirement funds to do this. It’s unconscionable. There’s a special place in hell for these kinds of people.
The problem for me is, what is the solution? Do I tell people to only deal with large brokerage firms? Sometimes they can be a bad choice, too. A few years ago, a major broker-dealer entered into a settlement with a regulator because of activities in its pension advisory service. But if you go to a small operation, you run the risk that internal controls are non-existent and your money disappears.
The cure, I think, is vigilance and skepticism. Nothing is as good as it seems. And if you don’t get a good explanation, leave.
That’s the view of one lawyer from Jupiter, Palm Beach County, Florida. I’m Marc Dobin.