Presenter warns of 401(k) rollover scams tied to self-directed IRAs

A presenter warned that a common scam involves persuading people to move money out of 401(k) accounts into self-directed individual retirement accounts, or SDIRAs, where fraudsters can sell expensive, hard-to-value investments.

"One of the common scams we see is what we call a 401(K) rollover scam," the presenter said, explaining that scammers try to convince investors to transfer funds from a 401(k) into a self-directed IRA. The presenter said the self-directed feature removes an intermediary who might otherwise provide oversight.

The advisory described the motive: because "almost all of your retirement funds are in 401(K)s," scammers target those accounts as "your biggest pile of money," then encourage a rollover to an SDIRA so there is "no intermediary, no fiduciary, no trusted advisor." The presenter said that, once funds are moved, scammers often pitch "overpriced, hard-to-value coins," and in many cases are charging "1 to 300 times the market value."

The presenter added that, without a trusted intermediary between the investor and the salesperson, "it's hard for you to know that you've just been ripped off." For listeners seeking guidance, the presenter directed them to the regulator's website: "For more information, go to cftc.gov."

The advisory focused on consumer protection and did not identify the speaker by name or organizational affiliation. It advised listeners to exercise caution before rolling over retirement accounts into investments they must value themselves and to consult official regulator resources for more information.