ADVISER'S SHAM PROGRAM FLEECES CLIENTS OF $800K IN SECURITIES!

SEC v. Jeffrey Higgins — U.S. Securities and Exchange Commission Litigation Release No. 26521, dated April 6, 2026.

The SEC charged Jeffrey Higgins, a former investment adviser, with misappropriating over $800,000 in securities from twelve clients. Higgins allegedly created a sham investment program, "Cumulus," to trick clients into believing they were buying discounted securities. Instead, he used client funds to buy securities at market prices and diverted some to his personal account using falsified documents.

In Plain English

Imagine you give your friend money to buy a special collectible item for you at a discount. Your friend tells you they got it for a great price, but in reality, they paid the normal price and secretly kept some of the items for themselves, showing you fake papers to cover it up. That's similar to what the SEC says Jeffrey Higgins did with his clients' money, taking over $800,000 worth of their investments.

Disclaimer: all facts are drawn from the SEC's own filings; the claims described are allegations unless and until a court rules or the parties settle, and some cases end in dismissal.

How the Alleged Scheme Worked

1. Create a Fake Program Jeffrey Higgins, an investment adviser, allegedly created a fake investment program called "Cumulus" between September 2017 and February 2024. He told his clients this program would let him buy securities at a discount from a third-party transfer agent.
2. Misappropriate Client Funds Instead of buying discounted securities, Higgins allegedly used his clients' money to purchase securities at the regular market price through the transfer agent. He did not inform his clients that the securities were not discounted.
3. Divert Securities to Personal Account Higgins then allegedly used a bulk transfer process at the transfer agent to move some of the purchased securities into his own personal brokerage account. He accomplished this by using falsified documents and signatures.
4. Fabricate Performance Reports To hide his actions, Higgins sent fake annual reports to his clients. He used a personal Hotmail account to send these reports, which falsely claimed increases in the value of their investments, when in reality, their holdings were worth less due to his misappropriation.
5. Scheme Unravels The alleged fraud came to light when Higgins could not fulfill a client's request for a withdrawal of funds. This failure exposed the scheme.
6. Confession to Firm In June 2024, after the scheme unraveled, Higgins admitted to the General Counsel and Chief Compliance Officer of his firm that he had been misappropriating securities from clients since around 2007.

The Enforcement Action

The SEC charged former investment adviser Jeffrey Higgins with misappropriating over $800,000 worth of securities from twelve clients between September 2017 and February 2024. Higgins allegedly created a sham investment program, "Cumulus," to facilitate the fraud, using falsified documents and signatures to divert securities to his personal account. The SEC seeks permanent injunctions, disgorgement with prejudgment interest, and civil penalties.

Named in this action: Jeffrey Higgins.

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