Section 4(g)(6) of the Securities Exchange Act of 1934 (Exchange Act), 15 U.S.C. § 78d(g)(6), requires the

Report on 
Activities
FISCAL YEAR 2024

ABOUT THIS REPORT AND DISCLAIMER
Section 4(g)(6) of the Securities Exchange Act of 1934 (Exchange Act), 15 U.S.C. § 78d(g)(6), requires the 
Investor Advocate to file two reports per year with the Committee on Banking, Housing, and Urban Affairs 
of the Senate and the Committee on Financial Services of the House of Representatives.
1
 The two reports 
are the mid-year Report on Objectives covering the forthcoming Fiscal Year and the end-of-year Report on 
Activities covering the preceding Fiscal Year.
A Report on Objectives is due no later than June 30 of each year, and its purpose is to set forth the objectives 
of the Investor Advocate for the following Fiscal Year.
2
 A Report on Activities is due no later than December 
31 of each year.
3
 The Report on Activities describes the activities of the Investor Advocate during the 
immediately preceding Fiscal Year. 
Disclaimer: Pursuant to Exchange Act Section 4(g)(6)(B)(iii), 15 U.S.C. § 78d(g)(6)(B)(iii), this Report on 
Activities is provided directly to Congress without any prior review or comment from the Commission, 
any Commissioner, any other officer or employee of the Commission outside of the Office of the Investor 
Advocate or the Office of Management and Budget. This Report on Activities expresses solely the views of 
the Investor Advocate. It does not necessarily reflect the views of the Commission, the Commissioners, or 
staff of the Commission, and the Commission disclaims responsibility for this Report on Activities and all 
analyses, findings, and conclusions contained herein.

REPORT ON ACTIVITIES: FISCAL YEAR 2024    |  iii
CONTENTS
MESSAGE FROM THE INVESTOR ADVOCATE   .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .1
FISCAL YEAR 2024 SUMMARY   .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .3
INVESTOR ENGAGEMENT    .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .  4
Investor Engagement Activities   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .  4
SEC and External Collaboration   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .  5
FY 2024 By the Numbers   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .  6
Interagency Securities Council   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .  7
Looking Ahead   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .  8
ADVOCACY FOR INVESTORS   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .  9
Problems Encountered by Investors   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .  9
RESEARCH AND INVESTOR TESTING   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .14
A New Survey Panel to Improve our Understanding of  
Investor Behavior and Decision Making   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .16
Investor Testing on Mutual Fund Fee Meters   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .  22
Research Examining Time Horizons    .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 27
MESSAGE FROM THE OMBUDS   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .31
ENDNOTES   .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .41

“
We renew our commitment to listen 
to investors, to amplify their experiences, 
to address their concerns, and to further 
improve the value of our contributions to 
work of the Commission.”

REPORT ON ACTIVITIES: FISCAL YEAR 2024    |  1
MESSAGE FROM THE  
INVESTOR ADVOCATE
T
he end of the 2024 fiscal year marks the 
conclusion of the tenth year of service 
for the Office of the Investor Advocate. 
We noted in our June 2024 Report 
to Congress that as the Office enters our second 
decade of service to the investing public, we renew 
our commitment to listen to investors, to amplify 
their experiences, to address their concerns, and to 
further improve the value of our contributions to 
the work of the Commission. 
We value that investors may want and need 
different outcomes from their investment strategies, 
and we strive to understand and elevate the 
diversity of investment perspectives to encourage 
policy making that more effectively serves the needs 
of investors. 
This Office has for many years dedicated resources 
to conduct and publish groundbreaking research 
focused on investors. To mark our tenth year 
of service and to renew our commitment to 
generate trusted, useful, and insightful data, in 
2024 the Office launched a program of quarterly, 
longitudinal surveys of investors. The Thoughtful 
Households Relating InVesting Experiences 
(THRIVE) Panel is a nationally representative 
survey that can facilitate frequent, direct survey 
research to provide timely data on investment-
related topics, and investor testing projects 
to inform policymaking or long-run research 
priorities. As detailed in this report, THRIVE 
was established to increase the cost-effectiveness, 
timeliness, and utility of the data collection efforts 
of this Office. The initiative has already yielded 
promising results, and we are confident that the 
value it can provide the Commission and the public 
will continue to grow.
This Report on Activities 
also continues our focus 
on investment fraud. 
In our June report, we 
spotlighted an explosion 
in fraud complaints. 
Fraud incidents continue 
to grow this year at 
an alarming pace, as 
reported by the Office 
of the Ombuds, as well 
as numerous regulators 
and law enforcement agencies. The Federal 
Trade Commission has reported that that 
overall losses due to fraud in 2023, adjusted for 
underreporting, was $158.3 billion.
4
 Investment 
fraud is increasingly a big part of that number. 
According to the United States Department of 
the Treasury’s 2024 National Money Laundering 
Risk Assessment, investment schemes have 
surpassed business email compromise as the 
highest aggregate reported dollar loss to victims.
5
 
The Ombuds’ Report describes in detail what 

2    |  OFFICE OF THE INVESTOR ADVOCATE
has emerged as a sadly prevalent pattern of 
financial deceit and devastation, as learned 
from the victims who contact our Office for 
assistance. We strongly encourage the greatest 
possible coordination among regulators and law 
enforcement to curb and cure the impacts on 
not only individual victims, but also the victims’ 
families and communities who also pay a price 
for fraud. 
Finally, on behalf of the Office of the Investor 
Advocate and the Office of the Ombuds, I would 
like to express the deepest gratitude for the service 
that Ombuds Stacy Puente has given to countless 
retail investors in her time with this office. At 
the end of the year, Ombuds Puente will step 
down from her role, which she has served with 
empathy, generosity, and intelligence. While her 
dedication and leadership will be missed, her 
commitment to serve the public—which everyone 
shares—will continue. 
I am pleased to submit this Report on Activities for 
Fiscal Year 2024 on behalf of the Office of the 
Investor Advocate, and I welcome any questions 
from Members of Congress.
Respectfully Submitted,
CRISTINA BEGOÑA MARTIN FIRVIDA 
Investor Advocate 

REPORT ON ACTIVITIES: FISCAL YEAR 2024    |  3
FISCAL YEAR 2024  
SUMMARY
112
ENGAGEMENT 
ACTIVITIES
2,772
INVESTOR SUBMISSIONS 
to the Ombuds
24
DATA    
COLLECTION  
ACTIVITIES completed
involving over
INDIVIDUAL INVESTOR 
CONTACTS
55,000
30
RULEMAKINGS and SRO FILINGS  
reviewed
193

4    |  OFFICE OF THE INVESTOR ADVOCATE
INVESTOR ENGAGEMENT 
T
he Office of the Investor Advocate 
(OIAD) is statutorily mandated to assist 
retail investors, identify problems that 
investors may have, analyze the potential 
impacts on investors of rules or regulations, and 
make proposals to the Commission to promote the 
interests of investors.
6
 
One of the primary ways in which OIAD collects 
this information and sustains a focus on investors 
is through ongoing investor engagement activities
7
, 
which directly support the statutory mandate and 
help amplify the voices of investors.
INVESTOR ENGAGEMENT ACTIVITIES
The Office actively seeks input from a broad range 
and variety of investors—including individual retail 
investors, smaller and regional investor groups, 
non-profits and consumer groups, academics and 
researchers, public and private pension funds, and 
other small and large money managers—as well as 
regulatory and law enforcement counterparts.
8
 
Retail investors, and their unique perspectives, 
are particularly important to OIAD. We place 
special emphasis on individuals and groups whose 
views and needs may be less frequently heard, 
including those who do not routinely travel to 
Washington, DC to lobby government leaders, or 
who do not regularly submit comment letters to the 
Commission. Among those whom OIAD especially 
seeks to hear from are older investors, new 
investors, veterans and military spouses, affinity-
connected investors, investors from historically 
underserved, rural, or Native American/First 
Nations’ communities, investors with disabilities, 
and investors with varying levels of exposure 
to capital markets. The Office also solicits and 
encourages input from stakeholders with a range of 
epistemological perspectives and values. 
The goals for investor engagement are twofold:
 ƒUnderstand investor experiences and 
perspectives regarding products, practices, 
regulations, rulemakings, and the markets, and 
communicate them in a decision-useful context 
for Commission leaders and staff; and 
ƒ	Advocate for investors’ interests in the 
regulatory and rulemaking environments in a 
manner consistent with the Office’s statutory 
mission.
This year, the Office expanded engagement 
opportunities for retail investors to share their 
experiences directly with Commission leadership 
FIGURE 1. Number of Engagements
FY 2022
72
FY 2023
142
FY 2024
112
FY 2021
88
FY 2020
41

REPORT ON ACTIVITIES: FISCAL YEAR 2024    |  5
and staff, meeting with a broad array of investors 
and investor representatives to gain from their 
perspectives and inform policy, and identifying and 
advocating for the trends, issues, and policies that 
investors consider to be important. By leveraging 
virtual and remote conferencing capabilities in a 
remote-first posture, in addition to the numerous 
in-person activities traditionally performed, OIAD 
was able to expand the available catchment area 
and welcome a number of new investors and 
related groups to share their experiences with the 
Investor Advocate.
9
 
One area in which OIAD further matured this 
year was to increase data-driven decision-support 
across our portfolio, which provided decision 
makers with useful and evidence-based investor 
preferences, trends, and capabilities. OIAD has the 
unique ability to identify, answer, evaluate, and 
operationalize the questions of:  
 ƒWhat do we learn from investors? 
ƒ	What do we do with that information? 
OIAD does this, in part, by partnering with 
other Divisions and Offices to hear directly from 
investors regarding the impact that potential rules 
and regulations have on investors and identify 
problems that investors may have with products 
or services. The goal is to further institutionalize 
stakeholder (i.e. investor) input into all stages of the 
Commission’s operations. 
SEC AND EXTERNAL COLLABORATION
The Office further enhanced available engagement 
opportunities with other SEC Divisions and 
Offices, federal departments, state agencies, and 
law enforcement partners—so that they could hear 
directly from investors how the Commission, and 
the government, can best serve them. This included:
 ƒDivisions and Offices 
 –The Office expanded opportunities for 
investors to communicate their perspectives 
directly with the Divisions. For example, 
during FY 2024, OIAD organized numerous 
investor engagement activities with Division 
and Office Directors, so they could hear 
investor commentary first-hand—including 
providing input on the Division of 
Examinations Exam Priorities for Fiscal 
Year 2025.
10
 
 ƒFederal Departments and Agencies 
 –In addition to the SEC, other federal 
departments and agencies are constantly 
working to protect the financial markets, 
products, and consumers. As part of the 
Office’s regular course of business, we often 
communicate and partner with federal 
agencies to support the larger investor 
advocacy mission, or to obtain diverse 
investor and stakeholder feedback consistent 
with our statutory mission. For example, the 
OIAD Investor Engagement Manager leads a 
Working Group related to Online Confidence 
Scams for the Commodity Futures Trading 
Commission (CFTC). 
 ƒState Agencies 
 –State Securities Regulators play a critical part 
in the regulatory and investor protection 
mosaic, and the Office continued to enhance 
the already strong connections with the 
North American Securities Administrators 
Association (NASAA) and individual state 
regulators. A recent example was in March 
2024, the Office led the SEC-NASAA-Georgia 
Secretary of State Joint Public Roundtables 
in Georgia.
11
 This event, which took place 
over two days at two different colleges in 
northern Georgia, was an opportunity to 
hear directly from investors and the public on 
topics important to them and was attended by 
Commissioner Hester Peirce, the Director of 

6    |  OFFICE OF THE INVESTOR ADVOCATE
the Division of Enforcement, and the Deputy 
Director of the Division of Examinations, 
amongst other Commission Leaders. The 
event was co-hosted with NASAA and the 
Georgia Secretary of State, and webcast via 
sec.gov.
 ƒLaw Enforcement Partners 
 –As part of OIAD’s commitment to investors, 
understanding the growth in investment 
frauds is of paramount concern. To enhance 
the Office’s ability to mitigate problems 
and promote the interests of investors, the 
Division of Enforcement has launched the 
Interagency Securities Council
12
 (ISC), with 
OIAD’s conceptualization and support. The 
ISC convenes recurring meetings between law 
enforcement and regulators at the federal, 
state, and local levels. Additional details 
are described in the Interagency Securities 
Council section below. 
FY 2024 BY THE NUMBERS
OIAD hosted or substantially contributed to over 
110 engagements in 2024, with the cornerstone 
event—the SEC-NASAA-Georgia Secretary of State 
Joint Public Roundtables—occurring in March 
2024 in Dahlonega at the University of North 
Georgia and at Dalton State College in Dalton, 
GA. At the roundtables, hundreds of investors, 
advocates, investigators, and regulators shared 
their experiences with investments, policy and 
regulation, securities fraud, and engaged with the 
Chair and Commissioners, Division and Office 
directors, and senior staff related to identifying 
fraud and avoiding suspicious investments.
INTERAGENCY SECURITIES COUNCIL
The Interagency Securities Council (“ISC”)
13
 is a 
joint task force that invites federal, state, and local 
regulatory and law enforcement professionals to 
meet quarterly to discuss the latest in scams, trends, 
frauds, and mitigation strategies, and provides 
briefings on emerging and complex topics. 
The ISC’s objective is to strengthen the cohesion 
between federal, state, and local agencies, enhance 
opportunities to collaborate on cases to protect 
investors, provide insight and guidance across the 
ecosystem for investigators who may not frequently 
operate in the securities space, and creates a 
forum for unified efforts in combating financial 
fraud. Chaired by the Director of the Division 
of Enforcement, the OIAD Investor Engagement 
Manager envisioned, developed, and leads the 
SEC’s efforts on the Council.
FIGURE 2. Phases of Investor Engagement
PHASE 1
Active listening
PHASE 2
Research and  
data analysis
PHASE 3
Collaboration and 
partnerships
PHASE 4
Decision-useful 
feedback to SEC 
leaders
PHASE 5
Integration into 
SEC Policies and 
Practices

REPORT ON ACTIVITIES: FISCAL YEAR 2024    |  7
The ISC is limited to law enforcement and 
regulatory agencies, and now includes nearly 
2,000 representatives from more than 250 
departments and agencies
14
, including federal 
financial and law enforcement agencies, state 
offices of attorneys general and state police, state 
securities regulators, and local police departments 
and sheriff’s offices. Members participate in 
discussions with experts on emerging threats, hear 
from investigators conducting and supervising 
investigations, and explore case study examples 
of agencies employing innovative approaches to 
combat financial fraud. The ISC also serves as 
an opportunity to connect and share information 
with the larger law enforcement community that 
less frequently deals with securities law violations, 
such as police/sheriff departments and tribal- and 
military-community law enforcement. 
In FY 2024, the ISC conducted meetings and 
specialized briefings with other agencies, such as 
a briefing on the use of deepfakes and artificial 
intelligence in financial frauds with the SEC’s 
Event and Emerging Risks Team, the FBI’s 
Complex Financial Crimes unit, and the Central 
Intelligence Agency. 
FIGURE 3. Investor Groups Represented
OIAD 
Engagement
Retail  
Investors
Financial Industry 
Representatives
Students and Young 
Professionals
Businesses and 
Capital Seekers
Pension Plans and 
Public Retirement 
Systems
Academic and 
Advocacy Groups
Legal 
Representatives
Institutional 
Investors

8    |  OFFICE OF THE INVESTOR ADVOCATE
LOOKING AHEAD
In FY 2025, OIAD operations will remain robust; 
with plans to continue engaging directly with retail 
investors through investor-focused meetings, events, 
activities, and roundtables, and by continuing to 
partner with other federal, state, and local agencies 
on issues relating to retail investors. 
Through these, and additional activities and 
strategies, OIAD will continue to include investor 
voices from the whole community in policy, 
practice, and advocacy. 
DIVISIONS AND OFFICES. Investor Roundtable
Atlanta Regional Office Director Nekia Hackworth Jones and then Division of Enforcement Director Gurbir 
Grewal at the Joint Investor Roundtables at the University of North Georgia and Dalton State College

REPORT ON ACTIVITIES: FISCAL YEAR 2024    |  9
FIGURE 4. Lists of Certain Problems Encountered by Investors During Fiscal Year 2024
Reported 
potentially 
problematic 
products or 
practices
SEC
15
• Relationship Investment Scams 
• Exchange-Traded Products (ETPs) 
Providing Access to Ether and Bitcoin 
• Fake Form 4 Filings 
• Accidental Text Messages on Social 
Media Platforms 
• Generation of excitement around 
emerging AI technology and 
deploying bots 
• Advertisements of certificate of 
deposit accounts with supposed 
high-yields 
• Leverage and Inverse ETFs
NASAA
16
• Digital Asset Frauds 
• "Pig Butchering" Schemes 
• Social Media & Internet Schemes
FINRA
17
• Phantom Riches
• Social Consensus
• Source Credibility
• Scarcity
• Reciprocity
PCAOB
18
• Proof of Reserve Assertions
• High Audit Deficiency Rates
• Recurring Quality Control Deficiencies
ADVOCACY FOR INVESTORS
T
his section of our annual Report on 
Activities describes a selection of our 
policy activities on behalf of investors 
for the period from October 1, 2023 
through September 30, 2024 (the Reporting 
Period). 
PROBLEMS ENCOUNTERED BY 
INVESTORS
Pursuant to Exchange Act Section 4(g)(6)(B)(III), 
we are required to provide a summary of the most 
serious problems encountered by investors during 
the prior fiscal year. In addition, the illustration 
below summarizes some of the other serious 
problems that investors have encountered during 
Fiscal Year 2024, based on our consultation with 
sources both within and outside the Commission.
Each of the products and practices listed below 
represents an area of concern for investors during 
the Reporting Period. OIAD communicates 
regularly with various Divisions and Offices within 
the Commission, including with the Division of 
Enforcement, the Division of Examinations, and 
the Office of Investor Education and Advocacy 
(OIEA), among others, to gain awareness of the 

10    |  OFFICE OF THE INVESTOR ADVOCATE
problematic products and practices that such 
Divisions and Offices may discern in the course 
of their work. The Office also maintains regular 
communications with other regulators, such as 
Financial Industry Regulatory Authority (FINRA), 
NASAA, Public Company Accounting Oversight 
Board (PCAOB), and the Municipal Securities 
Rulemaking Board (MSRB) to maintain visibility 
into problematic products and practices that those 
regulators have confronted in their day-to-day 
responsibilities during the reporting period.
Focus on Complex Investment Fraud
Public trust in the integrity of the securities markets 
is necessary for our capital markets to thrive. 
Investors are not required, however, to take a leap 
of faith by allocating their savings to the capital 
markets without a basis for trust in those markets. 
For decades, regulatory examination regarding, 
and enforcement of, our federal and state securities 
laws and rules have worked to instill that trust. 
This financial regulatory structure is designed to 
help protect investors and lower the cost of capital 
raising, benefitting market participants and the U.S. 
economy as a whole.
Unfortunately, investors who experience 
investment fraud, manipulation, or abuse often 
lose twice. First, having trusted a bad actor, such 
as a dishonest financial representative or an 
unregistered adviser, these investors may suffer the 
loss of some or all of their hard-earned savings. 
Second, they may experience a loss of confidence 
in the securities markets. With personal investment 
decisions becoming much more important to 
the well-being of Americans looking to save 
for retirement, the purchase of a home, or their 
children’s education, the loss of confidence in the 
securities markets can compound the damage 
already inflicted upon them by an unscrupulous 
financial representative or a criminal pretending 
to be a legitimate adviser. By retreating from the 
securities markets, investors who stow their money 
under the proverbial mattress may keep their funds 
safe from con artists, but those funds will not grow 
in value and, in fact, will lose buying power over 
time due to inflation.
Because of the foregoing considerations, our Office 
has focused on the problem of complex investment 
fraud over the last year and will continue to do 
so for the foreseeable future as these fraudulent 
schemes proliferate and gain momentum. Directly 
below, we discuss the highlights from our ongoing 
review of relevant news and reports, insights into 
new trends and growing complexity in the markets, 
and how our Office expects to address these 
developments. In the Ombuds’ Report, a deeper 
examination is provided of how investment fraud 
schemes currently threaten investors. 
Investment Fraud Trends
As noted in our last report to Congress, investment 
fraud continues to beleaguer contemporary 
investors, securities markets, and law enforcement. 
While investment fraud itself is not new, the 
methods used to commit such fraud constantly 
evolve, and as noted below in the Ombuds’ Report, 
our Office has experienced a recent surge in fraud 
complaints. Multiple government agencies, here 
and abroad, have recently also reported an increase 
in fraud generally. 
A common element in these reports, including 
complaints to our Office, is the role advanced 
technologies play in facilitating complex fraud. It 
is important to acknowledge that technological 
advancements are opening doors for new 
populations of investors to participate in the 
markets and build wealth. Additionally, innovative 
new financial products are allowing retail investors 
to access complex investment strategies previously 
reserved for sophisticated institutional investors. 
For some individuals who wish to invest in 

REPORT ON ACTIVITIES: FISCAL YEAR 2024    |  11
innovative products, the features of developing 
or emerging technologies may themselves be the 
impetus for becoming an investor. For instance,  
“the use of digital ledger technology (DLT) may 
have the potential to foster financial innovation, 
increase efficiencies, and improve access to 
financial products, services, and activities.”
19
These same advancements, however, enable 
criminals to deepen the pool of potential fraud 
victims. Evolving technology has made deception 
more challenging for investors to recognize. 
Technological advancements further provide 
criminals with the tools to communicate more 
effectively, scale their schemes more rapidly 
than before, and conclude their frauds through 
effectively unrecoverable payments. Alarmingly, 
investment fraud enabled by technology is 
accelerating at a scale and complexity not 
previously possible to accomplish even a year ago.
Given this new reality, it may be challenging to 
see through scams, especially when legitimate 
investment products and services have become 
increasingly complex and harder to understand. 
If it is difficult for investors to digest lawful, yet 
complicated disclosures, the resulting opaqueness 
can widen the window of opportunity for criminal 
behavior to occur.
Technology also permits fraudulent schemes to 
proliferate much more rapidly than in the past. 
As the Commission noted in a recent rulemaking 
proposal, “due to the scalability of [predictive data 
analytics (PDA)] technologies and the potential for 
firms to reach a broad audience at a rapid speed . . . 
any resulting conflicts of interest could cause harm 
to investors in a more pronounced fashion and on a 
broader scale than previously possible.”
20
 Although 
the Commission’s proposal was focused on the use 
of PDA technologies by firms acting lawfully and in 
good faith, its statements about the rapid scalability 
of harm associated with advanced technologies is 
relevant to bad actors as well.
While we acknowledge that investing in crypto 
assets may represent an entry point into investing 
for many investors, the Ombuds’ Report below 
details how evolving technologies, such as crypto-
related payments and social media has led to an 
increase in fraudulent schemes reported to the 
Ombuds. Beyond the Ombuds and within the SEC, 
OIEA has reported a similar increase in the number 
of complaints related to crypto-related investments. 
In its annual list of Ten Most Common Complaints, 
OIEA reported receiving 1,075 in fiscal year 
2020,
21
 4,599 in fiscal year 2021, 5,040 in fiscal 
year 2022, and 5,357 crypto-related complaints in 
fiscal year 2023.
22
 OIEA has published an Investor 
Alert warning that fraudsters are targeting victims 
by offering crypto related investments.
23
 While 
some fraud is committed using schemes wherein 
the underlying crypto-related investment itself is 
illegitimate, the vast majority of these fraudsters 
are simply using crypto-related payments as an 
enabling tool. Similarly, the SEC’s Office of the 
Inspector General has recently highlighted the 
challenges in protecting investors from crypto-asset 
related fraud.
24
The SEC’s Investor Advisory Committee has also 
expressed concern about digital-asset based fraud, 
and the semi-anonymous and borderless nature of 
crypto transactions that make them well-suited for 
various illegal activities such as money-laundering 
and tax evasion.
25
Beyond the SEC, other regulators are also reporting 
a significant increase in crypto-related complaints. 
For instance, in its Cryptocurrency Fraud Report 
for 2023, the Federal Bureau of Investigations 
(FBI) Internet Crime Complaint Center (IC3) 
reported receiving 69,468 complaints from the 
public regarding cyber-enabled crime and financial 

12    |  OFFICE OF THE INVESTOR ADVOCATE
fraud involving the use of crypto, with over 
$5.6 billion in reported losses, constituting a 45 
percent increase in reported losses since 2022. 
Losses from cryptocurrency-related investment 
fraud schemes reported to IC3 rose $2.57 billion 
in 2022 to $3.96 billion in 2023, an increase of 
53%. Many individuals reported accumulating 
massive debt to cover losses from these fraudulent 
investments. Additionally, of the complaints 
submitted to the FBI IC3, the exploitation of crypto 
was most pervasive in investment scams, where 
losses accounted for 71 percent of all losses related 
to crypto.
26
Similarly, the Federal Trade Commission (FTC) 
reported an increase in the amount that consumers 
reported losing to fraud, $10 billion in overall 
losses in 2023. The FTC also reported an increase 
in the amount that consumers lost to investment 
scams, with a 21 percent increase from 2022 
to 2023, and a reported loss of $4.6 billion in 
2023.
 27
 The second highest reported loss amount 
came from imposter scams, with losses of nearly 
$2.7 billion reported. Moreover, in its 2024 
Report on Protecting Older Consumers, the FTC 
acknowledged that underreporting results in an 
incomplete picture of the scale of the problem. 
The FTC estimated that overall losses due to 
fraud in 2023, adjusted for underreporting, was 
“$158.3 billion or $23.7 billion for consumers of 
all ages and $61.5 billion or $7.1 billion for older 
adults.”
28
 The FTC explained that those estimates 
are based on two different assumptions about the 
degree of underreporting for high dollar losses. 
Separate from crypto-related investment fraud, 
the SEC’s OIEA, NASAA, and FINRA have all 
warned investors that bad actors are using the 
growing popularity and complexity of AI to lure 
victims into scams.
29
 The FBI has noted that “AI 
provides augmented and enhanced capabilities to 
schemes that attackers already use and increases 
cyber-attack speed, scale, and automation.”
30
 The 
National Security Agency (NSA), the FBI, and the 
Cybersecurity and Infrastructure Security Agency 
(CISA) warn that “[m]alicious actors, many of 
them likely cyber criminals, often use multiple 
types of manipulated media in social engineering 
campaigns for financial gain. These may include 
impersonating key leaders or financial officers 
and operating over various mediums using 
manipulated audio, video, or text, to illegitimately 
authorize the disbursement of funds to accounts 
belonging to the malicious actor.”
31 
 Fraudsters 
also may use AI technology to produce realistic 
looking websites or marketing materials to 
promote investment scams, or deepfakes to 
deceive investors.
32
On a global level, as INTERPOL notes in its recent 
Global Financial Fraud Assessment: “Within 
financial fraud, technology has emerged as the 
key enabling factor for criminal groups . . . The 
use of artificial intelligence, large language models 
and cryptocurrencies combined with phishing-and 
ransomware-as-a-service business models have 
resulted in more sophisticated and professional 
fraud campaigns without the need for advanced 
technical skills, and at relatively little cost.”
33
 
Additionally, the World Economic Forum, in 
its The Global Risks Report 2024, reports that 
“easy-to-use interfaces to large-scale artificial 
intelligence models have already enabled an 
explosion in falsified information and so-called 
‘synthetic’ content, from sophisticated voice cloning 
to counterfeit websites.”
 34
 The World Economic 
Forum also ranks AI-generated “misinformation 
and disinformation” as the second highest risk 
“likely to present a material crisis on a global scale 
in 2024.”
35
 

REPORT ON ACTIVITIES: FISCAL YEAR 2024    |  13
As the use of crypto payments in the global 
financial system continues to increase, our Office 
will continue to pay close attention to the issues 
surrounding digital asset-based fraud and the 
technologies that are used to perpetrate those 
frauds. Our Office will also continue to work with 
our SEC colleagues to encourage that disclosures 
related to complex investment products and 
services are presented in a manner that retail 
investors can more easily digest. Conducting 
investor testing on proposed financial disclosures 
and continuing to strive for greater comprehension 
of those disclosures, may help retail investors better 
understand their legitimate investment choices, 
potentially reducing the opaqueness that criminals 
currently exploit to their advantage.
More generally, complex investment fraud will 
remain a key area of focus of our Office moving 
forward, given the billions in investor losses. We 
will maintain our outreach efforts to investors 
(particularly retail investors), financial regulators, 
market participants, and other stakeholders in 
an effort to better evaluate the myriad issues 
associated with investment fraud today. We will 
continue to explore ways to deter investment 
fraud and financial exploitation from occurring in 
the first place, as well as possible approaches to 
assisting the victims of fraudulent schemes more 
effectively after the fraud has occurred. We will 
continue to evaluate pending legislative proposals 
in Congress that relate to investment fraud 
and analyze their potential impact on investors 
and consider whether there may be a need for 
additional resources, or ways to deploy existing 
resources more productively, in countering 
investment fraud. Last, we strongly encourage 
the greatest possible collaboration among law 
enforcement agencies to combat investment fraud.

14    |  OFFICE OF THE INVESTOR ADVOCATE
RESEARCH AND  
INVESTOR TESTING
T
he Office of Investor Research (OIR) is 
a multidisciplinary research group that 
serves investors by identifying, analyzing, 
and addressing investors’ concerns. 
Through its role as part of the OIAD, OIR’s 
research on investor behavior and decision making 
provides an empirical basis for policy decisions, 
OIAD priorities, and SEC activities, ultimately 
helping investors succeed. 
OIR provides insights on how investors and 
other stakeholders interact with the investment 
marketplace and how they are affected by SEC 
policy. OIR enables OIAD and the Commission to 
more thoroughly:
1. “Identify areas in which investors would 
benefit from changes in the regulations of the 
Commission or the rules of self-regulatory 
organizations;”
36
2. Test potential policies before adoption, 
identifying areas in which investors would 
benefit from changes in regulation and allowing 
the Commission to “analyze the potential 
impact on investors of proposed regulations 
of the Commission. . . proposed rules of 
self-regulatory organizations . . . and . . . to the 
extent practicable, propose to the Commission 
changes in the regulations;”
37
3. Conduct “retrospective analysis of rules” 
to help ensure that policies are working as 
intended;
38
4. Study investor behavior and outcomes to 
“identify problems that investors have with 
financial service providers and investment 
products;”
39
 and
5. Generate evidence of organizational 
management and efficacy, particularly 
regarding “outcome” performance indicators.
To accomplish these aims, OIR draws on deep staff 
expertise from fields including economics, finance, 
psychology, and judgment and decision-making. 
OIR staff are recognized experts in these fields who 
have published over 60 peer-reviewed journal 
articles or book chapters and have presented 
research at more than 100 conferences during their 
careers. Despite having a team of only five full-time 
Ph.D. researchers, OIR’s team provides the SEC 
with expertise across broad subject matter and 
methodological areas.
Through the Policy-Oriented Stakeholder and 
Investor Testing for Innovative and Effective 
Regulation (POSITIER) initiative,
40 
 OIR’s founding 
architecture, OIR uses its expertise for long-term 
research projects of fundamental importance and 
applied, collaborative projects with SEC teams 
to inform policymaking. In these endeavors, OIR 
designs bespoke research using a variety of research 
methods, drawing on extensive experience with 
econometric modeling, natural language processing, 
text analysis, experimental design, survey methods, 
survey sampling, qualitative interviews, and other 
state-of-the-art research methods. Further, projects 
are designed to be rapid and cost-effective. 

REPORT ON ACTIVITIES: FISCAL YEAR 2024    |  15
FY 2024 was OIR’s most productive year in terms 
of data collection: we completed 21 distinct survey 
projects and three qualitative studies. Adding this 
work to our past efforts, OIR has conducted a total 
of 71 surveys or experiments, 18 qualitative 
studies, and several analyses of market data over its 
lifetime (since June 2017). Multiple rulemaking 
documents cite our research, thereby impacting the 
investing public. Additionally, we engage in 
thought leadership to policy and academic 
communities, encouraging others to serve investor 
interests through advocacy, research, or direct 
outreach. 
In FY 2024, highlights of our research group 
included:
 ƒEstablishment of the nationally representative 
THRIVE survey panel to help OIR contact 
investors in a timely, cost-effective manner. 
In the first quarter of FY 2024, we launched 
the nationally representative Thoughtful 
Households Relating InVesting Experiences 
(THRIVE) Panel to facilitate frequent, direct 
survey outreach with the public. THRIVE is 
a platform to help OIR conduct surveys that 
provide timely data on investment-related 
topics, and investor testing projects to inform 
SEC rulemaking and long-run research 
priorities. THRIVE was established to increase 
the efficiency of OIR’s data collection efforts, 
an initiative that has already yielded results. In 
part thanks to THRIVE, we had 57,855 total 
investor contacts in FY 2024, representing more 
than 4 times the number of investor contacts 
in FY 2023.
 ƒA rigorous research project on registered 
investment company fee meters to affect a 
potential rulemaking proposal. In conjunction 
with the SEC’s Division of Investment 
Management, OIR conducted research 
examining graphical displays of mutual fund 
expense ratios, known as “fee meters.” This 
project built on OIR’s published research, 
discussed in the OIAD’s FY 2022 Report on 
Activities,
41
 demonstrating that prototype fee 
meters could help investors viewing a set of 
index funds allocate a higher proportion of their 
hypothetical investment balance to lower-cost 
funds, thereby avoiding unnecessary fees. In 
the current work, we examined the effects of 
a fee meter when investors view a single fund, 
measuring potential impacts on knowledge 
of relative costs, evaluations of the fund, and 
interest in seeing an alternative mutual fund. 
This project highlights the value of long-run, 
iterative investor testing projects, with research 
leading to better-informed potential rulemaking 
activities.
 ƒA novel research project on the measurement 
of investor time horizons to understand factors 
driving reported time horizons. Financial time 
horizons are a key component of the financial 
advice that investors receive from financial 
advisers and brokers. Financial advisers and 
brokers often collect an investor profile to 
determine the best investment strategy for 
their clients, and according to regulatory 
interpretation by the SEC, the investor profile 
should include questions to understand 
the client’s time horizons.
42
 We show that 
seemingly minor variation in the response 
Qualitative
18
Quantitative
71
Over 
4X
 more investor 
contacts than the previous year

16    |  OFFICE OF THE INVESTOR ADVOCATE
options shown on time horizon questions can 
dramatically affect investors’ answers, changing 
the proportion who appear to have a long-run 
or short-run time horizon for their financial 
goals. This project expands OIR’s research on 
financial advice and raises questions about the 
consistency of existing time horizon elicitations, 
with likely downstream consequences for the 
quality of advice investors receive.
ƒ	Dissemination of investor-related research in 
multiple communities, including through the 
Boulder Summer Conference on Consumer 
Financial Decision Making, the RAND 
Behavioral Finance Forum, and the Current 
Innovations in Probability-based Household 
Internet Panel Research (CIPHER) Conference. 
These discussions help increase OIR’s impact by 
raising awareness of our research, generating 
additional interest about investor issues among 
researchers and policymakers, and identifying 
areas of future research.
As always, OIR is aware that making financial 
decisions and achieving financial security 
remain difficult for many. We will continue 
to pursue research to help the public to make 
better investment decisions and avenues for OIR 
to collaborate with SEC staff on high-impact 
projects. We anticipate continued work on specific 
research areas that would benefit from additional 
attention: financial product information and 
disclosure; provision of financial advice or related 
communications; and investor participation, 
perception, and decision-making in an evolving 
economic environment. The rest of this year’s 
report on investor testing presents additional details 
about our highlighted research projects. 
A NEW SURVEY PANEL TO IMPROVE 
OUR UNDERSTANDING OF INVESTOR 
BEHAVIOR AND DECISION MAKING
In the first quarter of FY 2024, we launched 
the Thoughtful Households Relating InVesting 
Experiences (THRIVE) Panel. OIR established 
THRIVE to facilitate frequent, direct survey 
outreach with the general public.
43
 THRIVE is 
a platform to help OIR conduct two primary 
activities: surveys that provide timely empirical data 
on investment-related topics, and investor testing 
projects to inform SEC rulemaking and long-run 
research priorities. As part of THRIVE quarterly 
surveys, the same 7,500 people are invited to 
answer recurring questions on investment decisions 
and household events, as well as novel questions 
examining contemporaneous areas of interest. 
For investor testing, THRIVE respondents (or 
subsamples of respondents) participate in custom 
projects designed by OIR to address rulemaking 
proposals or other key SEC policy needs. THRIVE 
is representative of the overall US population, with 
oversamples based on race and ethnicity to allow 
for subgroup analysis. 

REPORT ON ACTIVITIES: FISCAL YEAR 2024    |  17
Goals of THRIVE
OIR created THRIVE as a nationally representative 
survey panel focused on investing and the policy 
interests of OIAD and the SEC. To that end, 
THRIVE surveys include content reflecting OIAD 
priorities, including (1) the content, presentation, 
and manner of delivery of financial product 
information; (2) investor experiences related 
to the provision of financial advice and related 
communications; and (3) investor participation, 
perception, and decision-making in an evolving 
economic environment. 
THRIVE addresses OIR research needs in 
five important ways (Figure 5). First, a key 
responsibility of OIR is to conduct investor testing 
to support rulemaking. THRIVE facilitates online 
surveys, allowing respondents to view realistic 
sample elements of proposed disclosures, such as 
new text and visuals. Second, financial market 
events and policy interests can move quickly. 
THRIVE is designed so that OIR’s research 
can respond rapidly to time-sensitive requests, 
including from the SEC and Congress. An online 
standing panel allows us to identify respondents 
who would be suitable to meet current research 
needs and launch studies within a matter of 
weeks, not months. Third, the SEC is interested 
in understanding how investor behavior changes 
over time. By surveying the same people over 
time, we observe individual transitions (e.g., when 
a non-investor becomes an investor). Fourth, 
THRIVE’s panel structure—that is, returning to 
the same people over time rather than surveying 
new people each round—allows OIR to create and 
track repeated measures over time. Fifth, THRIVE 
provides a cost-effective way to meet OIR’s 
research needs. Linking an individual’s responses 
over time increases efficiency and reduces costs 
because relevant individuals can be targeted for 
surveys based on historical responses. Additionally, 
stable constructs that are used in many studies can 
be measured less frequently. As an example, the 
RILA research described in the Report on Activities 
for FY 2023
44
 could have benefited from THRIVE, 
as it would have allowed us to identify potential 
respondents based on their annuity ownership 
and draw on previously measured constructs such 
FIGURE 5. Why did we develop THRIVE? 
Investor testing to support rulemaking
Ability to respond to time-sensitive 
research needs
Study within-household shocks and 
changes
Creation of metrics
Cost-effective
Online surveys allow us to test disclosures, showing 
respondents text and visuals .
Quick survey delivery because we have already 
identified a sample suitable for many research projects .
By surveying the same people over time, we observe 
individual transitions .
By asking a repeating set of questions, we 
can reliably track trends and developments .
Linking responses over time increases efficiency and 
reduces costs . 

18    |  OFFICE OF THE INVESTOR ADVOCATE
as financial literacy. “Sampling” (i.e., identifying 
specific people to survey) typically represents 
a large proportion of the total time and costs 
required to field a nationally representative survey. 
With THRIVE, we created a reusable sample, 
mitigating many of the costs associated with survey 
research.
THRIVE Builds on OIR’s Experience and 
Expertise
THRIVE draws on the OIR team’s combined 
research experience and expertise (Figure 6). 
OIR staff have dedicated their careers to 
studying financial decision making; however, 
developing a panel requires additional expertise. 
Over their careers, the OIR team has developed 
hundreds of surveys and experiments. To develop 
survey questions, OIR draws on best practices 
for measuring key concepts and testing new 
questions, including conducting qualitative 
interviews to better understand how respondents 
understand survey questions. OIR also has 
experience with statistical methods, such as 
development of survey weights that are used to 
address any imbalances in the representativeness 
of the panel (for example, those introduced 
by oversamples based on race and ethnicity). 
Finally, members of the OIR team have over 
10 years of experience with panel management, 
which provides us with expertise in all aspects 
of designing and maintaining a panel, including 
recruiting and retaining participants, analyzing 
potential statistical biases related to drop-out, 
protecting respondents’ privacy, and determining 
whether participants’ responses are conditioned 
by repeated surveys.
Types of Surveys
THRIVE consists of three types of surveys: 
baseline surveys, quarterly surveys, and custom 
investor testing surveys. Survey content is selected 
and ordered to minimize respondent burden, 
where possible. 
There were two baseline surveys fielded in the fall 
of 2023. These baseline surveys were designed 
to provide an initial, thorough view of key 
investor behaviors and characteristics as well as 
fixed characteristics that are unlikely to change 
considerably over time. Baseline survey data 
provides ongoing value to the SEC by allowing 
surveys to be sent specifically to individuals 
with certain characteristics, ensuring future data 
collection is cost-effective. 
FIGURE 6. How Staff Expertise Contributes to THRIVE
• Financial decision making
• Survey development
• Experimental design
• Qualitative interviewing
• Statistical weighting
• Panel management
OIR STAFF EXPERTISE
THRIVE

REPORT ON ACTIVITIES: FISCAL YEAR 2024    |  19
Following the baseline surveys, OIR started 
quarterly THRIVE surveys in January 2024. There 
are two sections to each quarterly survey. The first 
section contains key recurring content, including 
investment behaviors in the preceding 90 days and 
measures of current financial status. The second 
section changes across quarters and includes 
questions to provide a deeper understanding of 
a given individual’s responses, or to measure 
concurrent topics of interest. This latter section 
can also include one-time modules to measure 
relatively stable individual characteristics that 
were not included in previous surveys. 
In addition to baseline and quarterly surveys, 
THRIVE can be used for custom investor testing 
surveys. These surveys can take many forms but 
may be used inform policy making, improve 
research methods, or examine other areas of 
long-term interest. 
Who is Included in THRIVE
Most THRIVE surveys, including the quarterly 
surveys, invite the same 7,500 people to respond. 
Participation rates are generally high, with 
approximately 6,000 people participating in each 
survey. This group includes both investors and 
non-investors, allowing us to monitor investor 
behavior, barriers to investing, and the transition 
from non-investor to investor. The THRIVE sample 
also oversamples Black, Hispanic, and Asian 
adults to ensure that we can accurately measure 
differences in behavior across these groups.
45
 
Figure 7 illustrates the demographic characteristics 
of the THRIVE panel.
FIGURE 7. Summary of THRIVE Participant Demographic Characteristics 
9.4%
Less than high school
28.8%
High school or equivalent
27.9%
Some college/associates degree
20.2%
Bachelor’s degree
EDUCATION
13.6%
Post grad study/professional degree
49.8%50.2%
MALEFEMALE
AGE
20%
15%
10%
5%
0%
12 .8%
18 .8%
18 .3%
14 .3%
18 .5%
12 .   0%
5 .3%
18-2455-6425-3465-7435-4475+45-54
RACE/ETHNICITY
8.0%
    Asian-Pacific Islander, 
non-Hispanic
1.4%    Two or more, 
non-Hispanic
0.6%  Other, non-Hispanic
57.4%  White, non-Hispanic
19.9%  Hispanic
12.7%  Black, non-Hispanic
GENDER

20    |  OFFICE OF THE INVESTOR ADVOCATE
Initial Lessons from THRIVE
Since launching THRIVE in October 2023, 
seven surveys have been fielded on the THRIVE 
panel. These surveys have contributed to 
ongoing research and to our understanding of 
key investment behaviors. Figure 8 illustrates 
several of the measures that we are tracking each 
quarter, weighted to be representative of the U.S. 
population. 
We find that over 60% of U.S. adults report having 
a retirement account, over 35% report owning a 
brokerage account, and approximately 10% report 
owning crypto currency, as shown in the top panel 
of figure 8. Overall, 70% report having one or 
more of these financial investments. These numbers 
are similar to those found in other nationally 
representative surveys. The Federal Reserve’s 2022 
Survey of Consumer Finance found that 54.4% 
report having retirement accounts.
46
 The FINRA 
2021 National Financial Capability Study found 
that 36% have brokerage accounts.
47
 The Federal 
Reserve’s 2023 Survey of Household and Economic 
Decisionmaking found that 6.7% reporting owning 
or buying cryptocurrency in the last year,
48
 while 
Pew Research reported in 2023 that 17% had ever 
owned cryptocurrency.
49
 
Because THRIVE surveys the same people multiple 
times a year, we are able to better understand 
changes in ownership over time. While the overall 
numbers suggest stability in overall ownership rates, 
they mask underlying changes in who owns each 
type of investment. As an example, over 15% of 
people who report owning cryptocurrency in April 
2024 do not report owning cryptocurrency three 
months later, in the July 2024 quarterly survey. 
There are similar numbers of people opening 
new accounts, highlighting a key benefit of panel 
data: the ability not only to observe levels but also 
changes in ownership. Further research is needed to 
understand whose ownership is changing, and the 
reasons behind these shifts. 
FIGURE 8. Recent Results from THRIVE panel
Last Sale of a Financial Investment 
Jan .
Survey
JulApr
7 .5%
5 .  0%
2 .5%
0 .0%
Proportion of U
 .S . Population
Last 30 Days30 to 90 DaysToday
Last Purchase of a Financial Investment 
Jan .
Survey
AprJul
20%
15%
10%
5%
0
Proportion of U
 .S . Population
Figures show the proportion of the U .S .    
population buying or selling in each of the 
THRIVE quarterly surveys .
Retirement Account
Crypto CurrencyAny Account
Brokerage Account
Percent of U.S. Population with  
Different Investment Types
Jan 2024Apr 2024
Survey
Jul 2024
75%
50%
25%
0
Proportion of U
 .S . Population

REPORT ON ACTIVITIES: FISCAL YEAR 2024    |  21
Another way of exploring ongoing investment 
behavior is to examine purchases or sales of assets 
in the last 90 days (Figure 8). In each of the surveys 
shown, approximately one quarter of the U.S. 
population reports purchasing a financial asset in 
the last 90 days, and approximately 10% report 
selling an asset in the last 90 days. The share 
purchasing assets almost certainly understates 
ongoing new contributions to retirement accounts 
through payroll deduction. Financial asset owners 
and purchasers include people from all walks of 
life; THRIVE is allowing OIR to better understand 
the behaviors of investors and non-investors alike.
The Future of THRIVE 
THRIVE provides OIR with a valuable tool for 
monitoring investor behavior and conducting 
investor testing. As a custom SEC resource, 
THRIVE is designed specifically to yield insights 
across the agency. Partially due to efficiencies 
gained by THRIVE, we had more than 4 times 
the number of investor contacts in FY 2024 as 
FY 2023. THRIVE provided data that contributed 
to our study of fee meters, discussed further below, 
and the measurement of key investor behaviors. 
OIR will continue to delve into these rich data to 
deepen our understanding of investor behavior and 
decision making. 
The value of THRIVE multiplies over time as we 
conduct interesting analyses across surveys and add 
future content. For instance, we can link data on 
asset ownership with major household events, or 
link information on investment advice and mutual 
fund knowledge to study the relationship between 
financial advice and beliefs about mutual fund fees. 
THRIVE is more efficient than recruiting new 
respondents from scratch; however, it requires 
maintenance. Quarterly data collection means 
OIR staff must engage frequently to ensure that 
surveys are responsive to emerging SEC and OIAD 
needs. OIR must retain specialized staff to ensure 
continued quality of THRIVE, with required 
expertise spanning both substantive fields and 
methodological training. Ensuring that THRIVE 
can continue to provide benefits to the SEC will 
require sufficient funding and staffing in the years 
to come.
INVESTOR TESTING ON  
MUTUAL FUND FEE METERS
Mutual fund fee dispersion raises recurring 
policy and academic concerns about whether 
investors are paying too much for mutual funds. 
Over the past several years, OIR has tested 
various disclosures of mutual fund fees designed 
to make consumers aware of the importance of 
fees and improve their decision making about 
investments. In our 2022 annual report, we 
described this work, which was subsequently 
published in the Journal of the Association for 
Consumer Research in 2023.
50
 In FY 2024, we 
continued this line of research through new 
testing exploring the effects of a mutual fund 
“fee meter.”
51
 The goal of a fee meter is to help 
investors compare fees across funds with similar 
objectives. Our testing uses no load mutual 
funds, so the only fees and costs are those 
reflected in the expense ratio (the percentage of 
an investor’s assets under management that the 
investor has to pay to the mutual fund company 
annually).

22    |  OFFICE OF THE INVESTOR ADVOCATE
Background on Price Dispersion and 
Potential Benefits of Shopping
The mutual fund market is characterized by 
significant price dispersion—that is, some 
funds are more expensive than others—even 
when accounting for differences in investment 
strategy and risk. Indeed, we found that the fees 
on no-load non-institutional share classes for 
S&P 500 mutual funds in 2023 ranged from 
0% to 1.61% per year (as shown in Figure 9), 
a pattern that has been demonstrated in past 
research studying historical dispersion in fees for 
S&P 500 index funds.
52
 There is also significant 
fee dispersion within and across broader sets of 
mutual funds.
53
It is important for investors to understand price 
dispersion in the mutual fund market so that 
they can make informed decisions about mutual 
funds. In particular, price dispersion across a set 
of funds that have a similar investment strategy 
and risk profile suggests that consumers who 
search the mutual fund market may find lower cost 
alternatives. Especially in the case of index funds, 
that seek to track the returns on an index such as 
the S&P 500, lower cost alternatives can provide 
investors an unambiguous financial benefit.
If the S&P 500 index rises by 10% in a given year, 
a high-fee S&P 500 mutual fund (with an expense 
ratio of 1.05%) would earn about 8.95% that 
year, whereas a low-fee fund (with an expense 
ratio of 0.14%) would earn about 9.86% that 
year. In subsequent years, investors remaining in 
the high-fee fund could forgo additional earnings 
on the money lost to fees, meaning that differences 
due to fees would compound over time. Continuing 
with our example of a 1.05% expense ratio fund 
and a 0.14% expense ratio fund, Figure 10 shows 
the difference in returns for a $10,000 investment 
over 10 years assuming an annual return of 10%. 
While the difference between these two investments 
is only $91 after the first year, after 10 years the 
difference is nearly $2,000.
Given this background, spurring investors to search 
for less expensive funds could save them significant 
amounts of money. Past research conducted by 
OIR
54
 suggests that fee meters may help consumers 
choose among a group of mutual funds, but did 
not explore whether providing such information 
for a single fund improves consumers’ knowledge 
of relative costs and helps them decide when it is 
in their interest to search for a cheaper fund. The 
current research addresses those gaps.
FIGURE 9. Distribution of Expense Ratios for S&P 500 Index Funds on the Market
6
5
4
3
2
1
0
0.0%
0.5%1.0%1.5%
Number of share classes
This figure shows the distribution of expense ratios for no-load, non-institutional share classes of S&P 500 index 
mutual funds, with each share class included separately, as of November 2023 .

REPORT ON ACTIVITIES: FISCAL YEAR 2024    |  23
Lesson 1. People Don’t Understand the 
Relative Cost of Fees 
Our research first sought to establish whether 
people are aware that a given mutual fund fee is 
relatively high or low. Each person viewed the 
expense ratio for one of four S&P 500 index funds, 
which varied in terms of their fees. Specifically, 
they were shown funds with an expense ratio of 
0.08%, 0.32%, 0.48%, or 0.49%. They were 
then asked to estimate the percent of similar funds 
that had a lower fee. Figure 11 shows the average 
estimates provided by participants, as well as the 
true relative costs. Across all expense ratios, people 
provided similar responses. Without context, 
they estimated that all four example fees were 
roughly in the 40th percentile of cost. We found no 
differences in response patterns by peoples’ mutual 
fund ownership and knowledge of mutual fund 
fees. These findings suggest that investors are not 
aware of relative costs in the mutual fund industry 
and that a visual aid containing this information 
may be helpful for investors.
The average errors (the difference between aqua 
bars and red lines) that we see in Figure 11 suggest 
that investors are most confused about relative 
costs for the cheapest and most expensive funds. 
Both errors are concerning. Investors who hold 
relatively inexpensive funds, but are unaware of 
those low costs, may be motivated to search for 
an alternative, but this could be a time-consuming 
activity with little financial benefit. On the other 
FIGURE 10. Approximate Value of a $10,000 
Investment Over Time Assuming a 10% 
Annual Return
30
26
22
18
14
10
Years
Dollars (Thousands)
This figure shows how the value of a $10,000 
investment changes over time, assuming a constant 
10% annual return . The “high fee” line portrays an 
investment in a fund with an expense ratio of 1 .05% . 
The “low fee” line portrays an investment in a fund 
with an expense ratio of 0 .14% .
16273845109
High feeLow fee
$24,444
$22,484
90
80
70
60
50
40
30
20
10
0
Percent of funds
FIGURE 11. Estimated and Actual Percent of 
Funds that are Less Expensive
Expense ratio (fee)
This figure shows estimated and actual percent of 
funds that are less than a given fee . For instance, 
participants receiving a fund with an expense ratio 
of 0 .08% thought that 42% of funds were cheaper, 
on average . However, only 19% of funds were 
cheaper . The difference between the height of the 
aqua bars and the red lines therefore shows the 
mismatch between estimated and actual relative 
costs . Participants, on average, underestimate the 
relative cost of funds with expense ratios of 0 .32% 
or higher .
0 .08%0 .32%0 .48%0 .49%
Estimated percent of funds that are less 
expensive
Actual percent of funds that are less expensive
42%42%
38%
42%
90
80
70
60
50
40
30
20
10
0
Percent of funds

24    |  OFFICE OF THE INVESTOR ADVOCATE
hand, if investors have an expensive fund but do 
not realize it, they are unlikely to shop around even 
if shopping would financially benefit them greatly.
The finding that many investors are unaware of 
fund fee dispersion can explain why some investors 
hold high-cost index funds. 
Lesson 2. Fee Meters Help People 
Understand Relative Costs
Given peoples’ lack knowledge of the dispersion 
of fees charged by mutual funds, we next designed 
an experiment to see if a simple visual aid could 
increase awareness of which funds were more or 
less expensive. Over 4,000 people were provided 
with information about a hypothetical S&P 500 
mutual fund including: the objective of the fund, 
fees, risk factors, and performance
People were randomly assigned to one of four 
different presentations of fee information: no meter 
(text only), a continuous meter, a discrete meter 
that adds category boundaries to the continuous 
meter, or a labeled meter that adds information 
about the fees at each category boundary 
(an example of the labeled meter is shown in 
Figure 12). We tested these different versions of the 
meter, as finding the optimal visual display requires 
testing such design elements. 
Participants were also randomly assigned to one of 
five fee levels: 0.14%, 0.37%, 0.50%, 0.51%, and 
1.05%, which covered much of the distribution 
of actual costs for S&P 500 index funds as of the 
time of the testing. In all meter conditions, the 
fee assigned to the participant was shown at the 
appropriate location along the meter. 
On average, people that saw any fee meter were 
more accurate about the relative cost of their 
assigned fee than those that did not see a fee meter. 
Figure 13 shows us that people viewing a fee 
meter were better able to assess the relative cost 
of the fund that they viewed—the gaps between 
the estimate (solid yellow, gray and blue lines) and 
true costs (dashed red line) were about half the size 
among those seeing a meter, versus those seeing 
fee information only as text (solid green line). For 
instance, people viewing only text information 
about fees estimated that a fund with a 1.05% 
expense ratio was more expensive than 45% of 
funds. With a fee meter, investors believed that fund 
was more expensive than 60% of funds, which is 
closer to the true value of 98%. While the meters 
increased the accuracy of these estimates, the exact 
characteristics of the meter (continuous, discrete, 
labeled) did not have a significant effect on cost 
percentile estimates.
Better informed investors will be able to make 
better decisions about their investments. Fee meters, 
which increase knowledge about relative costs, 
have the potential to help people make investment 
decisions that are right for them.
Lesson 3. More is Needed to Help People 
Translate Knowledge about Relative 
Costs into Behavior
In the case of index funds, those who believe 
that their fund is relatively expensive should be 
more interested in searching for a cheaper fund, 
whereas those who believe their fund is relatively 
inexpensive should be less interested in searching 
FIGURE 12. Example of a Fee Meter
This figure shows an example of a labeled fee meter 
for a hypothetical S&P 500 index fund with a 0 .37% 
expense ratio .
Middlewood Fund 
Fees: 0 .37%
0.14%0.24%0.36%0.51%
LowHigh

REPORT ON ACTIVITIES: FISCAL YEAR 2024    |  25
for a cheaper fund (as finding a cheaper fund is 
less likely). To measure these potential patterns, 
we asked participants for their interest in seeing 
an alternative to the fund they had been randomly 
assigned.
Overall, we found that there was a positive 
correlation between relative cost estimates and 
interest in seeing an alternative fund; in other 
words, people who thought their randomly 
assigned fund was expensive were more interested 
in looking at another option. The meters increased 
knowledge of relative costs, however, their impact 
on interest in an alternative fund was modest, 
suggesting frictions between knowledge of relative 
costs and behaviors that reduce fees paid.
OIR conducted additional analyses to delve into 
this relationship between relative cost estimates 
and interest in seeing another fund. Several factors 
may have contributed to the weakness of this 
relationship, including a lack of knowledge about 
the cumulative effect of fees over time and beliefs 
that paying higher fees could lead to higher returns. 
We asked two additional survey questions to 
explore whether people perceive the importance 
of fees. First, we asked participants whether they 
agree or disagree with the statement “Mutual fund 
fees have little impact on a fund’s performance in 
the long run.” Only 26% of participants disagreed 
or strongly disagreed (5% strongly disagreed), 
suggesting that they would not be motivated to 
reduce fees.
We also asked participants to report their beliefs 
about the relationship between fees and net returns, 
depicted in Figure 14. Overall, 20% believe that 
higher fees lead to higher returns, about a third 
(36%) reported that there was no relationship, 
FIGURE 13. Estimated and Actual Percent of Funds that are Less Expensive for Participants Seeing 
Fee Information as Text or on a Meter
100
80
60
40
20
0
Expense ratio (fee)
Percent of Funds
0 .140 .  50 .510 .371 . 05
Te x tLabeled MeterMeterActual ValueDiscrete Meter
This figure shows estimated and actual percent of funds that are less than a given fee . The lines represent the 
different experimental conditions . Each participant was in one of the following conditions: the fee in text (“Text”), 
a fee meter without cutoffs or labels (“Meter”), a fee meter with discrete cutoffs (“Discrete Meter”), or a meter 
with labels (“Labeled Meter”) . For reference, the figure also provides the actual percent of funds that are less 
than a given fee (“Actual Value”) .

26    |  OFFICE OF THE INVESTOR ADVOCATE
and only 12% believed that lower expenses would 
yield higher net returns. While this may be a noisy 
indicator of how investors viewed the funds offered 
in the experiment, it suggests some investors may 
have been willing to pay higher fees with the hope 
of achieving higher returns.
We believe that, together, these two survey 
questions suggest one barrier to translating 
between knowledge of fees and search behavior: 
people do not see fees as very important in 
determining investment outcomes. If individuals do 
not believe that mutual fund fees affect long-run 
performance, or believe that higher fee funds will 
yield higher returns, it is unlikely that they will seek 
lower-cost funds.
Summary of Findings and Discussion
This testing project demonstrates that, in the 
absence of additional information, consumers do 
not know the distribution of costs in the mutual 
fund market (Lesson 1). They tend to estimate 
that a variety of expense ratios are about the 
same in terms of relative costs. As these estimates 
hover around the 40th percentile regardless of the 
underlying fee, investors overestimate the cost of 
relatively inexpensive funds and underestimate the 
costs of relatively expensive funds. Providing them 
with comparative fee information in the form of a 
meter substantially improves their understanding 
of relative costs (Lesson 2). In turn, this improved 
knowledge increases interest in searching for an 
alternative fund. However, the increases in search 
were small, raising questions about the barriers that 
may exist to translating knowledge of relative costs 
into subsequent behavior (Lesson 3).
Overall, this project provides a data-driven 
approach to understanding potential investors’ 
reactions to mutual fund fees and fee information. 
Academic research raises longstanding questions 
about why fee dispersion continues to exist in the 
mutual fund market, especially for mutual funds 
like S&P 500 index funds, which are arguably 
interchangeable except for fees. At the same time, 
the policy community has a longstanding interest 
in ensuring that investors do not pay too much for 
mutual funds. Our results provide an important 
demonstration that price dispersion persists because 
of lack of knowledge of fees, and that fee meters 
may help investors understand cost information in 
their investment decisions. 
FIGURE 14. Perceived Relationship Between Mutual Fund Fees and Net Performance
0%25%20%35%30%15%5%10%40%
20%
Funds with higher expenses (i .e ., fees) tend 
to have higher net returns (after expenses)
12%
Funds with lower expenses (i .e ., fees) tend to 
have higher net returns (after expenses)
36%
There is no relationship between expenses 
(i .  e ., fees) and returns
32%
I don’t know
“Which of the following best describes your view on the relationship 
between a mutual fund’s expenses and performance?”

REPORT ON ACTIVITIES: FISCAL YEAR 2024    |  27
This research also helps illustrate the value that 
OIR can contribute to the SEC and broader 
research and policy communities, leveraging 
the group’s expertise in crafting and conducting 
custom, targeted research projects on important 
investor issues. The research represents another 
step in OIR’s journey to contribute to more 
effective disclosure policy, an important component 
of the SEC’s broader investor protection mission. 
In past annual reports, we have discussed mutual 
fund fee meters, fee jargon, performance displays 
and benchmarks, and performed holistic testing 
on disclosures for a particularly complex product. 
Each project has been designed to provide 
targeted insights on the product or display under 
consideration. Together, they have promise for 
moving the needle on investors’ overall experience 
with financial products.
This body of work also shows that much more 
can be done. In the future, we hope to continue 
to pursue research that reimagines investors’ 
experiences, concentrating on what have become 
recurring themes in our disclosure testing—among 
these: that simply disclosing information does not 
provide meaning or context, that there may be 
limits to baseline financial knowledge or education 
that constrain the value of disclosures, and that 
behavioral frictions to taking action mean that 
investors can be informed without increasing their 
well-being. We look forward to continued work 
with SEC and academic communities on these 
important issues.
RESEARCH EXAMINING 
TIME HORIZONS 
A critical component of investment decisions is 
their “time horizon,” defined as “the number 
of months, years, or decades [needed] to invest 
to achieve [a] financial goal.”
55
 When giving 
advice, registered investment advisers are required 
to “make a reasonable inquiry into the client’s 
financial situation, level of financial sophistication, 
investment experience, and financial goals,” and 
use an “investment profile,” typically consisting 
of a series of multiple choice questions, to do 
so.
56
 According to regulatory interpretation by 
the SEC, time horizons are important to include 
in the investment profile when recommending 
an investment strategy. Similarly, broker-dealers 
are legally required to determine whether 
securities transactions or investment strategies are 
appropriate for investors, based on investor profiles 
that include time horizon.
57
Given the importance of time horizons in 
investment advice and decision-making, the 
design and consistency of time horizon questions 
should be of interest to practitioners interested 
in investors’ well-being. In FY 2024, OIR 
conducted research to explore how reported 
time horizons vary depending on the “response 
options” provided to survey respondents.
58
 
Specifically, we varied whether respondents saw 
mostly “short-run” options, which listed many 
potential answers focusing on the near term (e.g., 
“Less than a week,” “The next week,” “The next 
Financial goals can 
happen at different 
times in the future .

28    |  OFFICE OF THE INVESTOR ADVOCATE
month”), or mostly “long-run” options, which 
listed many potential answers focusing on more 
distant periods (e.g., “The next 10–15 years,” 
“The next 15–20 years,” “More than 20 years”). 
Additionally, two other groups of respondents 
saw mostly “mid-run” options, with intermediate 
time periods, or an “open-ended” format, which 
allowed them to write any time period in a 
fill-in-the-blank format. Importantly, however, in 
all conditions, we designed the response options 
so that each set had a clear cutoff at one year, 
allowing us to classify all responses into longer or 
shorter than one year. 
Lesson 1. Whether Response Options are 
Short-Run, Mid-Run, Long-Run, or 
Open-Ended Impacts Reported 
Time Horizons
Using a nationally-representative sample of people, 
we asked the following question to measure time 
horizons, “In deciding how much of their income 
to spend or save, people are likely to think about 
different financial planning periods. In planning 
your saving and spending, [which of the following 
time periods/what time period] is most important 
to you?” This question is used on many nationally 
representative surveys to measure financial time 
horizons and has been analyzed to understand use 
of investment products, even though the question 
is not restricted to investment decisions
 
.
59
We find that people’s reported time horizons are 
shortest when they see short-run options, longest 
when they see long-run options, with mid-run and 
open-ended responses falling in between. When 
people see the set of short-run response options, 
they give time horizons greater than one year 18% 
of the time. When people see long-run response 
options, they report time horizons greater than 
one year 74% of the time (see Figure 15). Given 
that broker recommendations and investment 
advice from advisors are partially determined by 
time horizon questions, this research implies that 
the choice of response options may dramatically 
change investment allocations coming from 
brokers and advisors. 
Lesson 2. Mid-Run Responses are Closest 
to Open-Ended Responses, Likely Making 
Them the Most Accurate
Past research generally finds that open-ended 
questions allow people to answer questions in 
the most natural way,
60
 thus resulting in the most 
accurate estimates. Therefore, we included an 
open-ended condition which allowed participants 
to express time horizons in the way that was 
most natural to them. When we compare time 
horizons from this open-ended condition to time 
horizons provided in the short-, mid-, and long-run 
conditions, we find that those from the mid-run 
condition are closest to the open-ended time 
horizons (see Figure 15). This alignment suggests 
FIGURE 15. Proportion of Respondents 
Reporting a Time Horizon of Greater than  
One Year, by Condition 
This figure shows the proportion of respondents 
providing a time horizon of greater than one year, 
depending on the response options provided to the 
time horizon question .
75%
50%
25%
0
Condition
Closed Options
Open 
Option
Time Horizon Greater Than 1 Year
Short-runMid-runLong-runOpen- 
ended
18.0%
31.1%
74.0%
37.6%

REPORT ON ACTIVITIES: FISCAL YEAR 2024    |  29
that, of the sets of response options we tested, 
the mid-run options result in the most accurate 
estimates of people’s time horizons.
An alternative to the mid-run response options 
would be to administer the open-ended version of 
the question. As found in past research, however, 
people are more likely to skip open-ended 
questions, which may signal that this question 
is more burdensome to answer. Specifically, 
skip rates are roughly 3.4% for the open-ended 
question, versus at most 0.1% among the close-
ended questions, which limits the total coverage in 
our data.
Discussion and Conclusion
To our knowledge, past research has not explored 
the time horizons used in investor profiles. On 
publicly posted investor profiles, we see that short 
time horizon options include “Immediately” to 
“0–5 years”, while long response options vary 
from “10+ years” to “more than 20 years.” The 
responses we examined in our research varied 
less dramatically than these profiles, yet we find a 
56-percentage point difference in the proportion 
of respondents providing time horizons greater 
than one year. We therefore suspect that people’s 
responses may be substantially impacted by the 
investor profile question they encounter. Having 
a substantially different time horizon should 
dramatically change an investor’s optimal asset 
allocation, according to economic models of 
optimal investing behavior.
61
 Such different asset 
allocations could substantially impact portfolio 
returns and risk. Yet, we do not see a strong 
financial justification for why variation in time 
horizon response options should impact the asset 
allocation recommendation investors receive.
We examined the effects of response options on 
time horizons using a commonly-administered 
question that pertains to a range of financial 
decisions, including saving and spending. While 
the results of this research should be replicated in 
an investment context, these results suggest that 
brokers and advisors could consider using the 
set of mid-run response options, as they result 
in reported time horizons that are most similar 
to open-ended responses. When there is some 
personal interaction between clients and brokers 
or advisors, asset allocation differences coming 
purely from question differences may be reduced 
through additional discussion of financial goals 
and their timelines. 

“
It is all too clear that we have entered a new 
era, where protecting individuals from financial 
predators will require superior tactics and 
greater resources .”

REPORT ON ACTIVITIES: FISCAL YEAR 2024    |  31
MESSAGE FROM 
THE OMBUDS
T
his Report on Activities warns of a 
looming complex investment fraud 
crisis that could threaten the stability 
of our markets, our banking systems, 
and our lives. Professional fraudsters prey on 
victims in a digital world with no borders, through 
anonymous crypto transactions, and with endless 
opportunity to exploit our dependence on social 
media and technology. Anyone can fall victim to 
complex investment fraud—irrespective of party, 
demographics, location, or socioeconomic status. 
The exceptional scope and staggering financial 
impact of the current fraud crisis has been the 
subject of many alarming law enforcement reports 
and alerts. It is all too clear that we have entered 
a new era, where protecting individuals from 
financial predators will require superior tactics and 
greater resources. We urge Congress to provide 
the SEC, other financial regulators, and law 
enforcement agencies with the funds necessary to 
combat this criminal activity. Anything less than 
a fully resourced, coordinated strategy across law 
enforcement and regulatory leadership may fail to 
quell this rising tide of fraud. 
We also urge Congress to help restore investor trust 
in the agencies established to protect them. In the 
Ombuds Office, we hear the frustrated voices of 
investor distrust every day. There is a fundamental 
disconnect between investor perception of the SEC 
and what the SEC does, every day, on their behalf. 
This disconnect could prevent us from reaching the 
investors who most need our help.
It has been my honor to serve as the SEC Ombuds 
for over two years. In this role, I am proud to have 
led a team that assisted thousands of investors, 
conducted extensive research and reported 
groundbreaking findings on mandatory arbitration, 
and to have seized every opportunity to introduce 
the voices of retail investors throughout the 
Commission. Now, as I step down from my role 
this December, I would like to take the opportunity 
to introduce the staff 
of the SEC to members 
of Congress and to the 
investors that we serve. 
For almost ten years, I 
have called the SEC my 
professional home. The 
colleagues and friends I 
have met are among the 
most knowledgeable, 
goal-oriented, conscien-
tious professionals I’ve 
encountered in my 20-year legal career. The work 
of the agency is intensely complex and continually 
evolving, as our markets evolve to increasing levels 
of complexity. But agency staff are zealous in the 
execution of its innumerable tasks, guided at every 
step by the highest levels of ethical standards. 
SEC staff tirelessly educate themselves on new 
and developing areas of law and emerging market 
events, products, and trends. They are, at all times, 
cognizant of and dedicated to fulfilling the agency’s 
mission: to protect investors; maintain fair, orderly, 
and efficiency markets; and to facilitate capital 

32    |  OFFICE OF THE INVESTOR ADVOCATE
formation. Fulling these obligations sometimes 
requires working late nights, weekends, and long 
hours—with no expectation of remuneration, 
recognition, or reward—because the work must be 
done to serve the public interest. 
I would like to thank my SEC colleagues for their 
collaboration, their shared knowledge, and their 
assistance in fortifying the work of the Ombuds 
Office for the past two years. And I would like to 
express my profound appreciation to the Ombuds 
team, without whom the work of this Office 
would not have been possible. Your dedication 
is unparalleled, your integrity and courage 
unmatched. With your support, this tiny office 
has achieved outsized results for the protection of 
investors everywhere. 
As I write this, I recognize I am leaving the best 
and most impactful role I might ever have. So, I 
save my final thank you to the Investor Advocate, 
Cristina Martin Firvida, for entrusting me to serve 
in this capacity. I will take the knowledge and the 
empathy gained from this experience and carry it 
forward throughout my career. 
With gratitude to the agency that has forged me 
into a better lawyer and a better person, and with 
the hope that Congress will support the SEC in 
quashing the rising tide of fraud—I humbly submit 
this Ombuds Report on Activities for the Fiscal 
Year 2024. 
Respectfully Submitted,
STACY A . PUENTE 
Ombuds

REPORT ON ACTIVITIES: FISCAL YEAR 2024    |  33
WHO WE ARE 
The Securities Exchange Act requires the Investor 
Advocate to appoint an Ombudsman (Ombuds) 
to act as a liaison for retail investors to relay their 
concerns and questions about the Commission 
and the self-regulatory organizations (SROs) the 
Commission oversees.
62
 The Ombuds staff consists 
of an experienced team of lawyers, law clerks, 
and paralegals, each with differing subject matter 
expertise, all dedicated to providing personalized, 
tailored assistance to the retail investors that 
contact the Ombuds Office for help. Through 
direct engagement with investors, relevant parties 
within the Commission, and external stakeholders 
committed to investor protection issues, the 
Ombuds Office fulfills its statutory duty to help 
retail investors resolve issues relating to the 
Commission and SROs.
Among other statutory duties, the Ombuds must 
submit biannual reports to Congress describing the 
work of the office and its effectiveness in assisting 
retail investors.
63
 This Ombuds’ Report provides a 
look back on the Ombuds’ activities for the period 
October 1, 2023 through September 30, 2024, and 
discusses the Ombuds’ objectives and outlook for 
Fiscal Year 2025.
WHAT WE DO 
As noted above, the Ombuds is required by 
statute to: 
1. help retail investors resolve questions 
and complaints they may have with the 
Commission or with SROs the Commission 
oversees; 
2. review and make recommendations regarding 
policies and procedures that encourage 
investors to present questions to the Investor 
Advocate regarding compliance with the 
securities laws; 
3. take steps to ensure the confidentiality of 
investor communications with our Office; and 
4. submit biannual reports to the Investor 
Advocate that describe the activities and 
evaluate the effectiveness of the Office.
64
 
HOW WE HELP 
Our primary responsibility is to assist retail 
investors by resolving concerns, questions, and 
complaints about the SEC and the SROs subject 
to SEC oversight. We accomplish this in several 
ways—most commonly by providing information, 
making referrals, and collaborating with other 
divisions, offices, and SROs about complaints that 
impact investor interests. 
Figure 16 illustrates the process by which we 
receive and assist investors with their requests:
Additionally, we submit credible allegations 
of securities violations to the Divisions of 
Examinations and Enforcement for potential 
examination, investigation, or action. We study 
and report on issues of significant investor 
impact, assessing the effects of policies or 
practices on retail investors. Last, we inform the 
Investor Advocate and other interested parties 
within the Commission about trending investor 
protection concerns. 

34    |  OFFICE OF THE INVESTOR ADVOCATE
HOW TO CONTACT US 
Our primary means of communication with 
the public is through the Ombudsman Matter 
Management System (OMMS), an online portal 
for receiving, responding to, and managing data 
submitted to our Office. The public can also 
contact us by email, telephone, and regular mail. 
INVESTOR VOICES, BY THE NUMBERS 
The Ombuds team maintains 
records in OMMS of all submissions 
and responses handled by our 
Office. Matters are assigned a label 
or “Primary Issue Category,” reflecting the nature 
of the issues raised in the submission.
65
 
In tracking investor submissions by volume and by 
Primary Issue Category, OMMS may serve as an 
early warning system, flagging existing or potential 
risks for retail investors.
During the Reporting Period (October 1, 2023 – 
September 30, 2024), the Ombuds Office received 
and processed 2,772 matters submitted by U.S. 
and foreign investors, market participants, and 
other interested members of the public. Figure 17 
illustrates the number of matters divided into 12 
Primary Issue Categories, which are used to classify 
the nature of the submission.
In addition, the Ombuds team made approximately 
3,390 follow-up emails, phone calls, and other 
forms of correspondence to resolve the 2,772 
matters received—for a combined total of 6,162 
contacts with or on behalf of submitters from 
October 1, 2023, to September 30, 2024. Figure 18 
details the number of follow-up contacts with the 
public, separated by Primary Issue Category. 
The volume of matters submitted to the Ombuds 
Office and the team’s efforts to resolve these matters 
continue to grow over time. The total number of 
matters received in FY24 (2,772) increased by six 
percent from FY23 (2,605). More notably, the total 
Review
The Ombuds team reviews all incoming investor 
correspondence to determine if and how we may assist .
FIGURE 16. The Process by Which We Receive and Assist Investors with Their Requests 
Research
The Ombuds team identifies the nature of the issue, conducts 
tailored research, and engages with appropriate personnel 
within the Commission or SROs to gather relevant information .
Resolve
The Ombuds team works to resolve investor 
questions and complaints by providing 
investors with requested information and 
access to additional resources, by escalating 
certain matters through appropriate channels, when 
necessary, and by monitoring outcomes .

FIGURE 17. Matters by Primary Issue Category, 
October 1, 2023 – September 30, 2024
Allegations of securities law violations (247)
Atypical matters (543)
Inquiries about corporate disclosure/ 
registration (57)
FINRA Complaints/Questions/Procedures (74)
Investor Account matters: (840)
Investment products- questions/complaints (82)
Non-SEC/Other matters (351)
SEC Investigations/Litigation/Enforcement  
Actions (111)
SEC/Other Impersonators (91)
Other SEC Questions/Complaints (340)
Other SRO Complaints (29)
Potential Organized Campaign (7)
Total 2,772  
30%
4%
3%
9%
20%
3%
13%
2%
3%
12%
1%0.25%
REPORT ON ACTIVITIES: FISCAL YEAR 2024    |  35
number of contacts in FY24 (3,390) marked a 20 
percent increase from the number of contacts in 
FY23 (2,829). The growth in both metrics suggests 
two potential conclusions: (1) the public is more 
aware of the SEC Ombuds function, and more 
frequently contacts the Ombuds Office to resolve 
their questions, complaints and concerns; and (2) the 
matters received by the Ombuds team are increasing 
in complexity as well as number, requiring the 
Ombuds team to resolve these matters through a 
greater number of contacts on the public’s behalf. 
We note, for example, that Fiscal Year 2024 saw the 
creation of a new primary issue category for “SEC/
Other Impersonators.” This category was created in 
response to an influx of matters where the SEC’s or 
other regulator’s seal, and/or the name or signature 
of a real or purported SEC or other regulator 
employee were fabricated as part of a fraudulent 
scheme. Given the sensitivity surrounding these 
matters, they involve specific processing and 
FIGURE 18. Contacts by Primary Issue 
Category, October 1, 2023 – September 30, 
2024
Allegations of securities law violations (408)
66
Atypical matters (61)
Inquiries about corporate disclosure/ 
registration (85)
FINRA Complaints/Questions/Procedures (130)
Investor Account Matters: (1,136)
Investment Products-Questions/Complaints (110)
Non-SEC/Other Matters (431)
SEC Investigations/Litigation/ 
Enforcement Actions (175)
SEC/Other Impersonators (195)
Other SEC Questions/Complaints (606)
Other SRO Complaints/Questions/Procedures (30)
Potential Organized Campaign (11)
Securities Laws/Rules/Regulations (1)
67
SEC Questions/Complaints (12)
Total 3,390  
34%
5%
6%
12%
4%
3%
13%
18%
3%
0.35%
0.03%
0.32%
1%
2%

36    |  OFFICE OF THE INVESTOR ADVOCATE
require a greater degree of correspondence with the 
submitter and other offices within the Commission. 
In FY24, our Office handled 91 matters involving 
the fraudulent impersonation of an SEC or other 
regulatory employee, including one impersonation 
of the SEC Ombuds. 
The Ombuds Office continues to receive an 
increasing volume of complaints alleging fraud and 
other securities law violations. Such submissions 
increased by 28 percent from 2022 to 2023, and 
by 41 percent from 2023 to 2024,
68  
with most 
of the complaints involving crypto investments 
in some manner. Unfortunately, these matters are 
generally reported to our Office after the fraud has 
occurred, when it is too late to prevent them. We 
do our best to assist these investors, but there is 
often no recourse. We can only listen to their stories 
and offer information to prevent them from being 
victimized again in the future. 
In the following section of our Report, we share 
our understanding of the factors driving the 
expansion of these crimes, along with a snapshot 
of the fraud experience on a personal level. This 
section is based on reputable external sources as 
well as our own interactions with the investors we 
assist every day.
THE ONGOING FIGHT AGAINST FRAUD
Federal regulators—including the 
SEC—have witnessed a major 
proliferation in reported investment 
fraud schemes over the past 
several years.
69
 Most of the fraud-
related complaints the Ombuds Office receives 
involve fraudulent crypto investments initiated 
through social media contacts that later develop 
into relationship confidence scams. The types 
and sophistication of scams and scammers have 
evolved over time, revealing a nascent, global fraud 
industry with vast potential to invade and disrupt 
international securities markets.
Same game, new playbook, no rules 
It is well-known among law enforcement and 
regulators that criminals are quick to adopt new 
strategies and technologies. The launch of crypto 
and crypto investments has unfortunately resulted 
in the somewhat predictable emergence of crypto 
investment scams. The SEC’s Office of Investor 
Education and Advocacy has emphasized the 
inherent risks in crypto-related investments, which 
can be anonymous and difficult to trace (often 
across international borders), making it unlikely 
that the SEC or other regulators can recover lost 
investments.
70
 This makes crypto an ideal vehicle 
for criminal activity. Perhaps the most unsettling 
aspects of these crimes are the professionalized 
manipulation of victims and the industrial scope of 
the criminal operations.
Fraud has become an industry, in part, due to 
organized crime syndicates’ investment in “fraud 
factories,” high-security compounds located in 
countries where the rule of law is weak, and the 
ill-gotten gains give rise to a lucrative “shadow 
economy” that thrives outside the scrutiny of 
regulation.
71
 Research has shown that many 
individuals acting as scammers are doing so 
unwillingly, and are, themselves, victims of the 
fraud industry.
72
 Criminal syndicates target 
desperate, unsuspecting job seekers with fake job 
ads, inducing them to accept employment abroad. 
Upon arrival in the foreign country, their passports 
are confiscated, they are forced to participate in 
the fraud schemes, and they are not permitted to 
leave.
73
 They must follow scripts and processes 
that have been refined over time to psychologically 
manipulate targets into relinquishing their 
money. If the scammers fail to defraud their 
targets, they are subjected to coercive and abusive 
punishments.
74
 The horrors experienced by the 

REPORT ON ACTIVITIES: FISCAL YEAR 2024    |  37
human trafficking victims are well-documented, 
beyond comprehension, and beyond the scope of 
this report. However, international human rights 
groups are actively pursuing means to stop the flow 
of this exploited labor, which could ultimately curb 
the expansion of the fraud industry.
75
The script 
Investors that contact our Office for assistance 
regularly report that the fraud began with a 
single contact on social media or text: a question, 
a photograph, an invitation to connect. If the 
investor replies, fraudsters use various forms of 
psychological manipulation and intense, frequent 
communication to cultivate an intimate relationship 
with their intended victim. In this early stage, 
fraudsters might “love bomb” their targets, 
showering them with praise and affection to 
quickly establish trust and attachment. 
Scammers generally portray themselves as 
financially successful—success that they attribute 
to profitable cryptocurrency trades. The scammer 
may describe the cryptocurrency investments as 
one facet of their life and focus on other details of 
his life to appear trustworthy—such as concerns 
about family relationships, or hobbies. By casually 
referencing the crypto investment without soliciting 
the victim’s participation, the victim generally 
accepts the scammer’s claim about the investment’s 
profitability without feeling the need to confirm the 
truthfulness of the claim. 
The investor also shares information about their life 
with the scammer—their current financial situation 
and goals, information about family and friends, 
and the values that motivate them. As the scammer 
draws the victim into their confidence, they begin 
to use the investor’s personal information against 
them, often convincing them to reject loved 
ones who might question the legitimacy of their 
relationship or the eventual crypto investment. 
Closing the deal
Once the scammer believes they have successfully 
earned the victim’s trust, they will use other 
manipulative tactics, such as guilt, fear of missing 
out, or threatening to exit the relationship to 
coerce them to invest in the same “profitable” 
crypto investment through the same “investment 
group,” typically beginning with a low dollar 
amount paid into a crypto wallet. The scammer 
will show the investor lucrative but fake returns 
and convince them to invest more money in the 
scheme. Some investors report they would have 
never considered cryptocurrency investments, 
but for their trust in the relationship and the 
“evidence” of large returns. 
Eventually, the investor enters the final phase of 
the scheme when they unsuccessfully attempt to 
withdraw their earnings. The “investment group” 
requires that they pay “taxes” or “commissions” 
before their funds can be released. The scammer 
portrays the demands as routine and might use 
the investor’s personal information to suggest 
other resources with which to pay the fees: loans 
from family members, liquidating retirement 
accounts. Our team has spoken to investors at 
this stage who are nervous about the investments, 
and we have confirmed that the investments were 
fraudulent. Nevertheless, some investors were so 
swayed by the scammer that they still paid the 
“taxes” or “commissions.” 
The crypto investment firm delays release of 
the funds by continuing to demand additional 
payments. Eventually, the investor realizes they 
cannot recover any “returns” or even their initial 
investment amount. Communications with 
the scammer terminate along with the valued 
relationship.

38    |  OFFICE OF THE INVESTOR ADVOCATE
Revictimization: recovery fraud 
Unfortunately, there is often another layer to 
the scheme: recovery fraud. “Recovery firms,” 
purporting to be experts in cryptocurrency 
tracking, promise they will recover some or all a 
defrauded investor’s lost funds. They might contact 
victims on various social media or messaging plat-
forms or advertise their fraudulent recovery services 
in online news articles. The victims, desperate to 
recoup their losses after the scam, will pay the 
recovery firm to get their money back, not real-
izing the “recovery firm” might be involved in the 
initial fraud scheme. If anything, the firm might 
produce an inaccurate tracking report or submit a 
boilerplate letter to a regulator. Sadly, the investors 
hoping to recover their initial losses are defrauded 
yet again.
Our Office has received numerous boilerplate 
submissions from so-called recovery firms, and we 
have discussed these submissions with the Division 
of Enforcement. Through our team’s research, we 
discovered that a number of these submissions 
were drafted by the same recovery firm, purporting 
to be a consumer advocacy group assisting 
defrauded investors. 
The aftermath
Our Office has counseled individuals who have lost 
everything and are in debt after a lifetime of saving. 
In the end, scammers abscond with more than 
investors’ hard-earned money; they rob investors 
of their sense of security and well-being. Victims 
report feelings of profound loss at the betrayal 
and disappearance of their friend or lover. They 
regularly discuss their feelings of embarrassment 
for being deceived, and their regret for not heeding 
the warnings of family and friends. They have 
expressed fear of punishment from loved ones for 
engaging in a relationship that might be viewed as 
a betrayal. 
Media portrayals of fraud victims as naïve reinforce 
those negative feelings and discourage them from 
reporting the crime. Such portrayals also make it 
less likely for the general population to recognize 
that anyone could be the victim of an investment 
fraud scheme. Indeed, many of the victims assisted 
by our Office hold advanced degrees or own their 
own successful businesses, believing that their 
sophistication would have protected them from 
being defrauded. Educated, affluent individuals 
are often targeted in these schemes because of their 
financial success. They often report being aware of 
investor education efforts and news reports about 
investment fraud schemes. Yet investor education 
can only go so far. Scammers embed themselves 
so deeply in targets’ lives that targets are unable to 
imagine the betrayal. 
Outlook
The growing profitability of the fraud trade and 
the availability of exploited labor will predictably 
lead to an increasing number of victims absent 
aggressive, consolidated intervention from 
regulators and law enforcement. As discussed 
throughout this Report, such intervention is 
necessary on a global scale to stop the financial 
and emotional losses associated with fraud, and 
to stop the human suffering associated with the 
fraud enterprise. 
ENGAGING WITH THE PUBLIC
Investor Advocacy Clinic Summit 2024
On Friday, March 1, 2024, the Ombuds Office 
hosted the fifth annual Investor Advocacy 
Clinic Summit at the SEC Headquarters. The 
event, held in person for the first time since 
2019, was attended by over 170 guests and 
was livestreamed on the SEC’s website to 
nearly 1,000 viewers. Joined by the Office 
of Investor Education and Advocacy and the 

REPORT ON ACTIVITIES: FISCAL YEAR 2024    |  39
INVESTOR ADVOCACY CLINIC SUMMIT 2024. Engagement
Office of Minority and Women Inclusion, the 
event highlighted the work of the law school 
clinics and emphasized the need for additional 
law school clinics in underserved parts of the 
U.S. Due to funding and other constraints, the 
number of law school clinics has dwindled from 
a peak of 25 to 10. There are currently no clinics 
operating west of Chicago, and only one clinic 
exists south of Washington DC, leaving investors 
in most of the geographic U.S. without access to 
the unique and valuable pro bono services these 
clinics can provide. 
Prior to the official Summit, clinic directors held 
a roundtable to discuss the benefits of securities 
industry clinic experience for their students, 
their law schools, and their communities. During 
the Summit, all 10 active law school investor 
advocacy clinics engaged with SEC subject 
matter experts on the issues facing retail investors 
and their experiences in securities industry 
arbitrations. Participating law schools included (in 
alphabetical order): Benjamin N. Cardozo School 
of Law, Cornell Law School, Fordham University 
School of Law, Howard University School of 
Law, Northwestern Pritzker School of Law, Pace 
University School of Law, Seton Hall University 
School of Law, St. John’s University School of 
Law, University of Miami School of Law, and the 
University of Pittsburgh School of Law. 
The event featured remarks from SEC Chair Gary 
Gensler, Commissioners Hester Peirce and Jaime 
Lizárraga, as well as remarks from Richard Berry, 
the Director of Financial Industry Regulatory 
Authority (FINRA) Dispute Resolution Services, 
Cristina Martin Firvida, the SEC’s Investor 
Advocate, Richard Best, former Director of the 
SEC’s Division of Examinations, Eric Gerding, 
Director of the SEC’s Division of Corporation 
Finance, Gurbir Grewal, Director of the SEC’s 
Division of Enforcement, and William Birdthistle, 
former Director of the SEC’s Division of Investment 
Management (in order of appearance). Keynote 
remarks were delivered by Nicole Iannarone, 
then-Chair of FINRA’s National Arbitration and 
Mediation Committee and Professor of the Drexel 
University Kline School of Law. 
Additional Engagement Activities 
In addition to the Summit, Ombuds staff 
participated in numerous external and internal 
engagements throughout the fiscal year with the 
goal of improving our service to retail investors, 
and informing others about the services we 
provide. With the Investor Advocate, we met with 

40    |  OFFICE OF THE INVESTOR ADVOCATE
a college investment club about the investment 
preferences of new investors. Pursuant to our 
ongoing focus on investor fraud, our team 
met with investor protection groups and other 
federal agencies to discuss ways to prevent fraud 
before it occurs. At the NASAA Senior Issues 
Commission Annual Meeting, we discussed with 
other regulators and industry members the biggest 
challenges facing senior investors today—including 
online scams and investment fraud. We furthered 
our commitment to the law school investment 
advocacy clinics by attending the Securities 
Arbitration Roundtable at Fordham Law School, 
where we listened to clinic directors’ concerns 
about their ability to meet the needs of their 
clients. In July, representatives of the Ombuds 
Office attended the Commodity Futures Trading 
Commission’s (CFTC’s) first Fraud Disruption 
Conference, focused on financial confidence scams 
and how to prevent them. Ombuds staff also 
continued its periodic meetings with the Coalition 
of Federal Ombuds and the Public Investors 
Advocate Bar Association (PIABA). 

REPORT ON ACTIVITIES: FISCAL YEAR 2024    |  41
Endnotes
1 Exchange Act § 4(g)(6), 15 U.S.C. § 78d(g)(6).
2 Exchange Act § 4(g)(6)(A)(i), 15 U.S.C. § 78d(g)(6)
(A)(i).
3 Exchange Act § 4(g)(6)(B)(i), 15 U.S.C. § 78d(g)(6)
(B)(i).
4 Federal Trade Commission, Protecting Older 
Consumers, 2023-2024 (Oct. 18, 2024), https://
www.ftc.gov/system/files/ftc_gov/pdf/federal-trade-
commission-protecting-older-adults-report_102024.pdf.
5 U.S. Department of the Treasury, 2024 National 
Money Laundering Risk Assessment (Feb. 2024), 
https://home.treasury.gov/system/files/136/2024-
National-Money-Laundering-Risk-Assessment.
pdf#page=10.
6 See Exchange Act § 4(g)(4), 15 U.S.C. § 78d(g)(4) 
7 See SEC performance goals included in the Fiscal 
Year 2025 Annual Performance Plan, Securities 
and Exchange Commission, Fiscal Year 2025 
Congressional Budget Justification Annual 
Performance Plan Fiscal Year 2023 Annual 
Performance Report (Mar. 11, 2024), https://www.sec.
gov/files/fy-2025-congressional-budget-justification.
pdf#page=118.
8 See the definition included within the SEC 
performance goal #6, id. at 118.
9 OIAD conducted investor engagement activities with 
over forty new entities in fiscal year 2024.
10    SEC, Division of Examinations, 2025 Examination 
Priorities (Oct. 21, 2024), https://www.sec.gov/
files/2025-exam-priorities.pdf. 
11 See SEC, Event Webcast, SEC-NASAA-Georgia 
Secretary of State Joint Investor Roundtable (Mar. 27, 
2024), https://www.sec.gov/newsroom/meetings-
events/sec-nasaa-georgia-secretary-state-joint-investor-
roundtable. 
12 See Press Release, SEC, SEC Launches Interagency 
Securities Council to Coordinate Enforcement 
Efforts Across Federal, State, and Local Agencies 
(July 19, 2024), https://www.sec.gov/newsroom/press-
releases/2024-86. 
13 Id.
14    As of September 30, 2024.
15    This list of problematic products identified by the SEC 
is based on staff analysis of the alerts and bulletins 
issued by the SEC’s Office of Investor Education and 
Advocacy and the SEC’s Division of Examinations 
during fiscal year 2024. See, SEC, Office of Investor 
Education and Advocacy, Investor Alerts and 
Bulletins, https://www.sec.gov/investor/alerts (last 
visited Nov. 8, 2024); see also SEC, Division of 
Examinations, Risk Alerts, https://www.sec.gov/exams 
(last visited Nov. 8, 2024).
16 See NASAA, Top Investor Threats, https://www.nasaa.
org/investor-education/fraud-center/top-investor-
threats (last visited Nov. 8, 2024). 
17    This list of red flags is based on educator fraud 
tools developed by the FINRA Foundation during 
fiscal year 2023. See FINRA Investor Education 
Foundation, Fraud Tools, https://www.conemifyoucan.
org/fraud-tools/index.html (last visited Nov. 8, 2024).
18    PCAOB,    Investor Advisory—Exercise Caution with 
Third-Party Verification/Proof of Reserve Reports 
(Mar. 8, 2023), https://pcaobus.org/resources/
information-for-investors/investor-advisories/
investor-advisory-exercise-caution-with-third-
party-verification-proof-of-reserve-reports; Erica Y. 
Williams, Chair, PCAOB, Statement on Rise in Audit 
Deficiency Rates (July 25, 2023), https://pcaobus.org/
news-events/speeches/speech-detail/chair-williams-
statement-on-rise-in-audit-deficiency-rates.
19    The International Organization of Securities 
Commissions, Final Report with Policy 
Recommendations for Decentralized Finance (Dec. 
2023), https://www.iosco.org/library/pubdocs/pdf/
IOSCOPD754.pdf.
20    Conflicts of Interest Associated with the use of 
Predictive Analytics by Broker-Dealers and Investment 
Advisers, Exchange Act Release No. 97990, Advisers 
Act Release No. 6353, 88 Fed. Reg. 53960 (proposed 
July 26, 2023), https://www.sec.gov/files/rules/
proposed/2023/34-97990.pdf.
21    SEC, Office of Investor Education and Advocacy, 
Investor Complaints Data Archive (Nov. 6, 2024), 
https://www.sec.gov/data/investor-complaints-data-
archive.
22 Id.
23    SEC, Office of Investor Education and Advocacy, 
Five Ways Fraudsters may lure Victims into Scams 
Involving Crypto Asset Securities, Investor Alert (May 
29, 2024), https://www.investor.gov/introduction-
investing/general-resources/news-alerts/alerts-bulletins/
investor-alerts/crypto-scams.
24 See SEC, Office of the Inspector General, The 
Inspector General’s Statement on the SEC’s 
Management and Performance Challenges (Oct. 
2024), https://www.sec.gov/files/statement-secs-
management-performance-challenges-october-2024.
pdf.
25    Letter from the SEC Investor Advisory Committee to 
Gary Gensler, Chair, SEC (Apr. 6, 2023), https://www.
sec.gov/files/20230406-iac-letter-cryptocurrency.pdf.
26    Federal Bureau of Investigation, 2023 Cryptocurrency 
Fraud Report, https://www.ic3.gov/AnnualReport/
Reports/2023_IC3CryptocurrencyReport.pdf 
(referencing error in the original).
27    Press Release, Federal Trade Commission, As 
Nationwide Fraud Losses Top $10 Billion in 2023, 
FTC Steps Up Efforts to Protect the Public (Feb. 9, 
2024), http://www.ftc.gov/news-events/news/press-
releases/2024/02/nationwide-fraud-losses-top-10-
billion-2023-ftc-steps-efforts-protect-public.
28    Federal Trade Commission, Protecting Older 
Consumers, 2023-2024 (Oct. 18, 2024), https://
www.ftc.gov/system/files/ftc_gov/pdf/federal-trade-
commission-protecting-older-adults-report_102024.pdf.
29    SEC, Office of Investor Education and Advocacy, 
Artificial Intelligence (AI) and Investment Fraud 
(Jan. 25, 2024), https://www.investor.gov/
introduction-investing/general-resources/news-alerts/
alerts-bulletins/investor-alerts/artificial-intelligence-
fraud.

42    |  OFFICE OF THE INVESTOR ADVOCATE
30    Press Release, Federal Bureau of Investigation San 
Francisco Division, FBI Warns of Increasing Threat 
of Cyber Criminals Utilizing Artificial Intelligence 
(May 8, 2024), https://www.fbi.gov/contact-us/
field-offices/sanfrancisco/news/fbi-warns-of-
increasing-threat-of-cyber-criminals-utilizing-artificial-
intelligence. 
31    National Security Agency, Federal Bureau of 
Investigation & Cybersecurity and Infrastructure 
Security Agency, Contextualizing Deepfake Threats 
to Organizations (Sept. 2023), https://media.
defense.gov/2023/Sep/12/2003298925/-1/-1/0/
CSI-deepfakethreats.pdf.
32 Supra endnote 23.
33   INTERPOL,   Financial Fraud Assessment: A 
Global Threat Boosted by Technology at 11 (Mar. 
11, 2024), https://www.interpol.int/en/News-and-
Events/News/2024/INTERPOL-Financial-Fraud-
assessment-A-global-threat-boosted-by-technology 
(report found at bottom of news release).
34    World Economic Forum, The Global Risks Report 
2024 (Jan. 2024), https://www3.weforum.org/docs/
WEF_The_Global_Risks_Report_2024.pdf.
35 Id.
36    See Exchange Act § 4(g)(4)(B), 15 U.S.C. § 78d(g)(4)
(B).
37    See Exchange Act § 4(g)(4)(D-E), 15 U.S.C. § 78d(g)
(4)(D-E).
38 See Exec. Order No. 13563, 3 C.F.R. 13563 (2011).
39    See Exchange Act § 4(g)(4)(C), 15 U.S.C. § 78d(g)(4)
(C).
40    In this section of the report, we refer to the 
Office of Investor Research (OIR) and POSITIER 
synonymously.
41    SEC, Office of the Investor Advocate, Report on 
Activities, Fiscal Year 2022 (Dec. 15, 2022), https://
www.sec.gov/files/fy22-oiad-sar-activities-report.
pdf (see subsection titled Helping Investors Make 
Decisions About Mutual Funds Using Visual Aids). 
42 Interpretative Releases Relating to the Investment 
Advisers Act of 1940 and General Rules and 
Regulations Thereunder, 17 C.F.R. § 276.
43    Katherine Carman, Alycia Chin, Jonathan Cook, 
Steven B. Nash, Brian Scholl & David B. Zimmerman, 
The Thoughtful Households Relating InVesting 
Experiences (THRIVE) Panel (Sept. 2024),  
https://www.sec.gov/files/thrive-panel-technical-
documentation.pdf. 
44    SEC, Office of the Investor Advocate, Report on 
Activities, Fiscal Year 2023 (Dec. 5, 2023), https://
www.sec.gov/files/2023-oiad-annual-report.pdf (see 
section titled “Registered Index-Linked Annuities 
(RILAs)”).
45    Andrew Mercer, Oversampling is Used to Study Small 
Groups, Not Bias Poll Results, Pew Research Center 
(Oct. 25, 2016), https://www.pewresearch.org/short-
reads/2016/10/25/oversampling-is-used-to-study-
small-groups-not-bias-poll-results.
46 See Board of Governors of the Federal Reserve 
System, Survey of Consumer Finances, 1989 – 2022 
(Nov. 2, 2023), https://www.federalreserve.gov/
econres/scf/dataviz/scf/chart/#series:Retirement_
Accounts;demographic:all;population:1;units:have.
47 See FINRA Investor Education Foundation, Financial 
Capability in the United States (July 2022), https://
www.finrafoundation.org/sites/finrafoundation/files/
NFCS-Report-Fifth-Edition-July-2022.pdf (author’s 
calculations from data).
48     Board of Governors of the Federal Reserve System, 
Survey of Household Economics and Decisionmaking 
(Oct. 7, 2024), https://www.federalreserve.gov/
consumerscommunities/shed_data.htm (see author’s 
calculations from data).
49    Michelle Faverio, Wyatt Dawson & Olivia Sidoti, 
Majority of Americans Aren’t Confident in the Safety 
and Reliability of Cryptocurrency, Pew Research 
Center (Oct. 24, 2024), https://www.pewresearch.
org/short-reads/2024/10/24/majority-of-americans-
arent-confident-in-the-safety-and-reliability-of-
cryptocurrency.
50    SEC, Office of the Investor Advocate, Report on 
Activities, Fiscal Year 2022 (Dec. 15, 2022), https://
www.sec.gov/files/fy22-oiad-sar-activities-report.pdf 
(see section titled Helping Investors Make Decisions 
About Mutual Funds Using Visual Aids); see also the 
published, peer-reviewed version of the research, Brian 
Scholl, Adam Craig & Alycia Chin, A Picture is Worth 
a Thousand Dollars: Visual Aids Promote Investor 
Decisions, 8 Journal of the Association for Consumer 
Research 416 (2023), https://www.journals.uchicago.
edu/doi/abs/10.1086/726428?journalCode=jacr.
51    Alycia Chin, David Zimmerman, Jonathan Cook, 
Katherine Carman & Brian Scholl, Investor Testing 
on Registered Investment Company Fee Meters (SEC, 
Working Paper No. 2024-01, 2024), https://www.sec.
gov/files/ric-fees-report.pdf.
52 See Ali Hortaçsu & Chad Syverson, Product 
Differentiation, Search Costs, and Competition 
in the Mutual Fund Industry: A Case Study 
of S&P 500 Index Funds, 119 The Quarterly 
Journal of Economics 403 (2004), https://doi.
org/10.1162/0033553041382184; Brian Scholl, Adam 
Craig & Alycia Chin, A Picture is Worth a Thousand 
Dollars: Visual Aids Promote Investor Decisions, 8 
Journal of the Association for Consumer Research 
416 (2023), https://www.journals.uchicago.edu/doi/
abs/10.1086/726428?journalCode=jacr.
53 See Michael J. Cooper, Michael Halling & Wenhao 
Yang, The Persistence of Fee Dispersion Among 
Mutual Funds, 25 Review of Finance 365 (2021); 
https://doi.org/10.1093/rof/rfaa023; Investment 
Company Institute, Investment Company Fact Book 
(2023), https://www.ici.org/system/files/2023-05/2023-
factbook.pdf.
54 See Brian Scholl, Adam Craig & Alycia Chin, 
A Picture is Worth a Thousand Dollars: Visual 
Aids Promote Investor Decisions, 8 Journal of 
the Association for Consumer Research 416 
(2023), https://www.journals.uchicago.edu/doi/
abs/10.1086/726428?journalCode=jacr.
55    SEC, Office of Investor Education and Advocacy, 
Time Horizon, https://www.investor.gov/introduction-
investing/investing-basics/glossary/time-horizon (last 
visited Dec. 2, 2024).
56 See Interpretative Releases Relating to the Investment 
Advisers Act of 1940 and General Rules and 
Regulations Thereunder, 17 C.F.R. § 276.

REPORT ON ACTIVITIES: FISCAL YEAR 2024    |  43
57 See Regulation Best Interest: The Broker Dealer 
Standard of Conduct, 17 C.F.R. §240 (see also 84 Fed. 
Reg. 33,318).
58    David Zimmerman, Alycia Chin & Wändi Bruine De 
Bruin, Question Design Matters: Response Options 
Influence the Length of Reported Financial Time 
Horizons (SEC, Working Paper No. 2024 – 02, 2024), 
https://www.sec.gov/files/impact-response-options-
financial-time-horizons.pdf.
59    For surveys using financial time horizons, see Board 
of Governors of the Federal Reserve System, 2023 
Survey of Consumer Finances (2023), https://www.
federalreserve.gov/econres/scfindex.htm; Olivier 
Armantier, Giorgio Topa, Wilbert van der Klaauw, & 
Basit Zafar, An Overview of the Survey of Consumer 
Expectations, 23 Economic Policy Review 51 (2017), 
https://www.newyorkfed.org/research/epr/2017/
epr_2017_overview-of-sce_armantier. For research 
examining how time horizons pertain to investment 
related financial decisions, see Harvey S. Rosen & 
Stephen Wu, Portfolio Choice and Health Status, 72 
Journal of Financial Economic 457 (2004), https://
doi.org/10.1016/S0304-405X(03)00178-8; see also 
Kenneth J. White Jr. & Stuart J. Heckman, Financial 
Planner use among Black and Hispanic Households, 29 
Journal of Financial Planning 40 (2016), https://www.
financialplanningassociation.org/article/journal/SEP16-
financial-planner-use-among-black-and-hispanic-
households.
60    Vera Toepoel, Corrie Vis, Marcel Das & Arthur 
Van Soest, Design of Web Questionnaires: An 
Information-Processing Perspective for the Effect of 
Response Categories, 37 Sociological Methods & 
Research 371 (2009), https://journals.sagepub.com/
doi/10.1177/0049124108327123.
61    Zvi Bodie, Robert C. Merton & William F. 
Samuelson, Labor Supply Flexibility and Portfolio 
Choice in a Life Cycle Model, 16 Journal of Economic 
Dynamics and Control 427 (1992), https://doi.
org/10.1016/0165-1889(92)90044-F.
62 Exchange Act Section 4(g)(8)(B)(i), 15 U.S.C. § 78d(g)(8)
(B)(i).
63 Exchange Act Section 4(g)(8)(D), 15 U.S.C. § 78d(g)(8)(D).
64 Exchange Act Section 4(g)(8)(B),(D), 15 U.S.C. § 78d(g)(8)
(B),(D).
65    The 12 Primary Issue Categories can be defined as 
follows:
1. Allegations of Securities Law Violations: Investor 
alleges that an individual, firm, or entity has 
violated or is violating the U.S. securities laws.
2. Atypical matters: Matters of undetermined or 
harassing nature. 
3. FINRA Complaints/Questions/Procedures: 
Questions or complaints relating to a FINRA 
investigation or arbitration, a FINRA employee, or 
about FINRA rules, policies, or procedures. 
4. Inquiries about Corporate Disclosure/Registration: 
Questions about SEC filings and other matters 
relating to corporate disclosure. 
5. Investment Products—Questions/Complaints: 
Questions or complaints about a specific type of 
investment product. 
6. Investor Account Matters: Questions or 
complaints relating to a retail investor’s personal 
investments or finances. 
7. Non-SEC/Other Matters: Questions or complaints 
about issues that do not fall within the SEC’s 
jurisdiction. 
8. Other SEC Questions/Complaints: Questions or 
complaints about the SEC, including its policies, 
procedures, rules, and employees. 
9. Other SRO Complaints/Questions/Procedures: 
Questions or complaints relating to the policies, 
procedures, or rules of an SRO other than FINRA. 
10. Potential Organized Campaign: Submission 
appears to be part of a coordinated effort by 
multiple individuals to contact the Ombuds’ Office 
about the same issue. 
11. SEC Investigations/Litigation/Enforcement 
Actions: Questions or complaints about SEC 
investigations, litigation, or other related issues, 
such as distributions. 
12. SEC/Other Impersonators: Complaints about SEC 
or SRO impersonators, and complaints involving 
fraudulent use of the SEC or SRO seal. 
66    Effective October 1, 2023 (FY2024), the primary 
category label used for allegations of fraud or 
securities law violations (“Allegations of Securities 
Law Violations/Fraud”) became “Allegations of 
Securities Law Violations,” which encompasses fraud. 
During fiscal year 2024, three matters reflecting 
the prior primary category label were reopened and 
processed by staff. Because these matters appropriately 
fit the new label, “Allegations of Securities Law 
Violations,” we have included them in the count for 
that primary category in fiscal year 2024.
67    The primary issue categories “Securities Laws/Rules/
Regulations,” and “SEC Questions/Complaints” were 
assigned to matters created before the establishment 
of the current primary issue categories. These older 
matters were reopened in fiscal year 2024. See n. 66, 
infra.
68 The Ombuds Office received ninety-one matters 
involving SEC or other impersonators in fiscal 
year 2024, virtually all of which involved fraud. 
To obtain a more accurate reflection of the volume 
of fraud complaints for this calculation, we have 
combined the number of SEC/other impersonations 
(ninety-one) with the number of allegations of 
securities law violations (247), for a total of 338 
reported allegations of fraud and other securities 
law violations. This number reflects a 41% increase 
over the 240 allegations of fraud and securities law 
violations received in fiscal year 2023. See SEC, Office 
of the Investor Advocate, Report on Activities, Fiscal 
Year 2023, at 35 (Dec. 5, 2023), https://www.sec.gov/
files/2023-oiad-annual-report.pdf.
69 See Report, infra, at 10-13.

44    |  OFFICE OF THE INVESTOR ADVOCATE
70 See SEC, Office of Investor Education and Advocacy, 
Investor Bulletin: Initial Coin Offerings (July 25, 
2017), https://www.investor.gov/introduction-
investing/general-resources/news-alerts/alerts-
bulletins/investor-bulletins-16; See also Lori Schock, 
Director, SEC, Office of Investor Education and 
Advocacy, Thinking about Buying the Latest New 
Cryptocurrency or Token?, https://www.investor.gov/
additional-resources/spotlight/directors-take/thinking-
about-buying-latest-new-cryptocurrency-or (last 
visited Sept. 6, 2024).
7
1 See generally Friedrich Schneider & Dominik 
Enste, Hiding in the Shadows: The Growth of the 
Underground Economy, International Monetary Fund 
(2002), https://www.imf.org/external/pubs/ft/issues/
issues30.
7
2 See, e.g., U.S. Department of State, Online 
Recruitment of Vulnerable Populations for Forced 
Labor (June 2023), https://www.state.gov/wp-content/
uploads/2023/12/Online-Recruitment-of-Vulnerable-
Populations-for-Forced-Labor.pdf; Federal Bureau of 
Investigation, Public Service Announcement: The FBI 
Warns of False Job Advertisements Linked to Labor 
Trafficking at Scam Compounds (May 22, 2023), 
https://www.ic3.gov/PSA/2023/psa230522.
7
3 See id.
7
4 See generally United Nations, Human Rights Office 
of the High Commissioner, Online Scam Operations 
and Trafficking into Forced Criminality in Southeast 
Asia: Recommendations for a Human Rights 
Response (Dec. 2023), https://bangkok.ohchr.org/
wp-content/uploads/2023/08/ONLINE-SCAM-
OPERATIONS-2582023.pdf.
7
5 See id.



U .S . SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

Report on 
Activities

FISCAL YEAR 2024



ABOUT THIS REPORT AND DISCLAIMER

Section 4(g)(6) of the Securities Exchange Act of 1934 (Exchange Act), 15 U.S.C. § 78d(g)(6), requires the 
Investor Advocate to file two reports per year with the Committee on Banking, Housing, and Urban Affairs 
of the Senate and the Committee on Financial Services of the House of Representatives.1 The two reports 
are the mid-year Report on Objectives covering the forthcoming Fiscal Year and the end-of-year Report on 
Activities covering the preceding Fiscal Year.

A Report on Objectives is due no later than June 30 of each year, and its purpose is to set forth the objectives 
of the Investor Advocate for the following Fiscal Year.2 A Report on Activities is due no later than December 
31 of each year.3 The Report on Activities describes the activities of the Investor Advocate during the 
immediately preceding Fiscal Year. 

Disclaimer: Pursuant to Exchange Act Section 4(g)(6)(B)(iii), 15 U.S.C. § 78d(g)(6)(B)(iii), this Report on 
Activities is provided directly to Congress without any prior review or comment from the Commission, 
any Commissioner, any other officer or employee of the Commission outside of the Office of the Investor 
Advocate or the Office of Management and Budget. This Report on Activities expresses solely the views of 
the Investor Advocate. It does not necessarily reflect the views of the Commission, the Commissioners, or 
staff of the Commission, and the Commission disclaims responsibility for this Report on Activities and all 
analyses, findings, and conclusions contained herein.



R E P O R T  O N  A C T I V I T I E S :  F I S C A L  Y E A R  2 0 2 4   |   iii

CONTENTS

MESSAGE FROM THE INVESTOR ADVOCATE.  .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   1

FISCAL YEAR 2024 SUMMARY.  .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   . 3

INVESTOR ENGAGEMENT .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                                     4
Investor Engagement Activities .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                                 4
SEC and External Collaboration .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                                 5
FY 2024 By the Numbers.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                                     6
Interagency Securities Council.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                                 7
Looking Ahead.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                                           8

ADVOCACY FOR INVESTORS.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                                   9
Problems Encountered by Investors.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                               9

RESEARCH AND INVESTOR TESTING .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                              14
A New Survey Panel to Improve our Understanding of  
Investor Behavior and Decision Making.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                             16
Investor Testing on Mutual Fund Fee Meters.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                        22
Research Examining Time Horizons .  .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .  27

MESSAGE FROM THE OMBUDS.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                                  31

ENDNOTES.  .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   41



“We renew our commitment to listen 

to investors, to amplify their experiences, 

to address their concerns, and to further 

improve the value of our contributions to 

work of the Commission.”



R E P O R T  O N  A C T I V I T I E S :  F I S C A L  Y E A R  2 0 2 4   |   1

MESSAGE FROM THE  
INVESTOR ADVOCATE

T he end of the 2024 fiscal year marks the 
conclusion of the tenth year of service 
for the Office of the Investor Advocate. 
We noted in our June 2024 Report 

to Congress that as the Office enters our second 
decade of service to the investing public, we renew 
our commitment to listen to investors, to amplify 
their experiences, to address their concerns, and to 
further improve the value of our contributions to 
the work of the Commission. 

We value that investors may want and need 
different outcomes from their investment strategies, 
and we strive to understand and elevate the 
diversity of investment perspectives to encourage 
policy making that more effectively serves the needs 
of investors. 

This Office has for many years dedicated resources 
to conduct and publish groundbreaking research 
focused on investors. To mark our tenth year 
of service and to renew our commitment to 
generate trusted, useful, and insightful data, in 
2024 the Office launched a program of quarterly, 
longitudinal surveys of investors. The Thoughtful 
Households Relating InVesting Experiences 
(THRIVE) Panel is a nationally representative 
survey that can facilitate frequent, direct survey 
research to provide timely data on investment-
related topics, and investor testing projects 
to inform policymaking or long-run research 

priorities. As detailed in this report, THRIVE 
was established to increase the cost-effectiveness, 
timeliness, and utility of the data collection efforts 
of this Office. The initiative has already yielded 
promising results, and we are confident that the 
value it can provide the Commission and the public 
will continue to grow.

This Report on Activities 
also continues our focus 
on investment fraud. 
In our June report, we 
spotlighted an explosion 
in fraud complaints. 
Fraud incidents continue 
to grow this year at 
an alarming pace, as 
reported by the Office 
of the Ombuds, as well 
as numerous regulators 
and law enforcement agencies. The Federal 
Trade Commission has reported that that 
overall losses due to fraud in 2023, adjusted for 
underreporting, was $158.3 billion.4 Investment 
fraud is increasingly a big part of that number. 
According to the United States Department of 
the Treasury’s 2024 National Money Laundering 
Risk Assessment, investment schemes have 
surpassed business email compromise as the 
highest aggregate reported dollar loss to victims.5 
The Ombuds’ Report describes in detail what 



2  |   O F F I C E  O F  T H E  I N V E S T O R  A D V O C AT E

has emerged as a sadly prevalent pattern of 
financial deceit and devastation, as learned 
from the victims who contact our Office for 
assistance. We strongly encourage the greatest 
possible coordination among regulators and law 
enforcement to curb and cure the impacts on 
not only individual victims, but also the victims’ 
families and communities who also pay a price 
for fraud. 

Finally, on behalf of the Office of the Investor 
Advocate and the Office of the Ombuds, I would 
like to express the deepest gratitude for the service 

that Ombuds Stacy Puente has given to countless 
retail investors in her time with this office. At 
the end of the year, Ombuds Puente will step 
down from her role, which she has served with 
empathy, generosity, and intelligence. While her 
dedication and leadership will be missed, her 
commitment to serve the public—which everyone 
shares—will continue. 

I am pleased to submit this Report on Activities for 
Fiscal Year 2024 on behalf of the Office of the 
Investor Advocate, and I welcome any questions 
from Members of Congress.

Respectfully Submitted,

CRISTINA BEGOÑA MARTIN FIRVIDA 
Investor Advocate 



R E P O R T  O N  A C T I V I T I E S :  F I S C A L  Y E A R  2 0 2 4   |   3

FISCAL YEAR 2024  
SUMMARY

112
ENGAGEMENT 
ACTIVITIES

2,772
INVESTOR SUBMISSIONS 
to the Ombuds

24DATA  
COLLECTION  
ACTIVITIES completed
involving over

INDIVIDUAL INVESTOR 
CONTACTS

55,000

30
RULEMAKINGS and SRO FILINGS  
reviewed

193



4  |   O F F I C E  O F  T H E  I N V E S T O R  A D V O C AT E

INVESTOR ENGAGEMENT 

T he Office of the Investor Advocate 
(OIAD) is statutorily mandated to assist 
retail investors, identify problems that 
investors may have, analyze the potential 

impacts on investors of rules or regulations, and 
make proposals to the Commission to promote the 
interests of investors.6 

One of the primary ways in which OIAD collects 
this information and sustains a focus on investors 
is through ongoing investor engagement activities7, 
which directly support the statutory mandate and 
help amplify the voices of investors.

INVESTOR ENGAGEMENT ACTIVITIES
The Office actively seeks input from a broad range 
and variety of investors—including individual retail 
investors, smaller and regional investor groups, 
non-profits and consumer groups, academics and 
researchers, public and private pension funds, and 
other small and large money managers—as well as 
regulatory and law enforcement counterparts.8 

Retail investors, and their unique perspectives, 
are particularly important to OIAD. We place 
special emphasis on individuals and groups whose 
views and needs may be less frequently heard, 
including those who do not routinely travel to 
Washington, DC to lobby government leaders, or 
who do not regularly submit comment letters to the 
Commission. Among those whom OIAD especially 
seeks to hear from are older investors, new 
investors, veterans and military spouses, affinity-
connected investors, investors from historically 
underserved, rural, or Native American/First 

Nations’ communities, investors with disabilities, 
and investors with varying levels of exposure 
to capital markets. The Office also solicits and 
encourages input from stakeholders with a range of 
epistemological perspectives and values. 

The goals for investor engagement are twofold:

	� Understand investor experiences and 
perspectives regarding products, practices, 
regulations, rulemakings, and the markets, and 
communicate them in a decision-useful context 
for Commission leaders and staff; and 

§	Advocate for investors’ interests in the 
regulatory and rulemaking environments in a 
manner consistent with the Office’s statutory 
mission.

This year, the Office expanded engagement 
opportunities for retail investors to share their 
experiences directly with Commission leadership 

FIGURE 1. Number of Engagements

FY 2022

72

FY 2023

142

FY 2024

112

FY 2021

88

FY 2020

41



R E P O R T  O N  A C T I V I T I E S :  F I S C A L  Y E A R  2 0 2 4   |   5

and staff, meeting with a broad array of investors 
and investor representatives to gain from their 
perspectives and inform policy, and identifying and 
advocating for the trends, issues, and policies that 
investors consider to be important. By leveraging 
virtual and remote conferencing capabilities in a 
remote-first posture, in addition to the numerous 
in-person activities traditionally performed, OIAD 
was able to expand the available catchment area 
and welcome a number of new investors and 
related groups to share their experiences with the 
Investor Advocate.9 

One area in which OIAD further matured this 
year was to increase data-driven decision-support 
across our portfolio, which provided decision 
makers with useful and evidence-based investor 
preferences, trends, and capabilities. OIAD has the 
unique ability to identify, answer, evaluate, and 
operationalize the questions of:  

	� What do we learn from investors? 
§	What do we do with that information? 

OIAD does this, in part, by partnering with 
other Divisions and Offices to hear directly from 
investors regarding the impact that potential rules 
and regulations have on investors and identify 
problems that investors may have with products 
or services. The goal is to further institutionalize 
stakeholder (i.e. investor) input into all stages of the 
Commission’s operations. 

SEC AND EXTERNAL COLLABORATION
The Office further enhanced available engagement 
opportunities with other SEC Divisions and 
Offices, federal departments, state agencies, and 
law enforcement partners—so that they could hear 
directly from investors how the Commission, and 
the government, can best serve them. This included:

	� Divisions and Offices 
	– The Office expanded opportunities for 
investors to communicate their perspectives 
directly with the Divisions. For example, 
during FY 2024, OIAD organized numerous 
investor engagement activities with Division 
and Office Directors, so they could hear 
investor commentary first-hand—including 
providing input on the Division of 
Examinations Exam Priorities for Fiscal 
Year 2025.10 

	� Federal Departments and Agencies 
	– In addition to the SEC, other federal 
departments and agencies are constantly 
working to protect the financial markets, 
products, and consumers. As part of the 
Office’s regular course of business, we often 
communicate and partner with federal 
agencies to support the larger investor 
advocacy mission, or to obtain diverse 
investor and stakeholder feedback consistent 
with our statutory mission. For example, the 
OIAD Investor Engagement Manager leads a 
Working Group related to Online Confidence 
Scams for the Commodity Futures Trading 
Commission (CFTC). 

	� State Agencies 
	– State Securities Regulators play a critical part 
in the regulatory and investor protection 
mosaic, and the Office continued to enhance 
the already strong connections with the 
North American Securities Administrators 
Association (NASAA) and individual state 
regulators. A recent example was in March 
2024, the Office led the SEC-NASAA-Georgia 
Secretary of State Joint Public Roundtables 
in Georgia.11 This event, which took place 
over two days at two different colleges in 
northern Georgia, was an opportunity to 
hear directly from investors and the public on 
topics important to them and was attended by 
Commissioner Hester Peirce, the Director of 



6  |   O F F I C E  O F  T H E  I N V E S T O R  A D V O C AT E

the Division of Enforcement, and the Deputy 
Director of the Division of Examinations, 
amongst other Commission Leaders. The 
event was co-hosted with NASAA and the 
Georgia Secretary of State, and webcast via 
sec.gov.

	� Law Enforcement Partners 
	– As part of OIAD’s commitment to investors, 
understanding the growth in investment 
frauds is of paramount concern. To enhance 
the Office’s ability to mitigate problems 
and promote the interests of investors, the 
Division of Enforcement has launched the 
Interagency Securities Council12 (ISC), with 
OIAD’s conceptualization and support. The 
ISC convenes recurring meetings between law 
enforcement and regulators at the federal, 
state, and local levels. Additional details 
are described in the Interagency Securities 
Council section below. 

FY 2024 BY THE NUMBERS
OIAD hosted or substantially contributed to over 
110 engagements in 2024, with the cornerstone 
event—the SEC-NASAA-Georgia Secretary of State 
Joint Public Roundtables—occurring in March 
2024 in Dahlonega at the University of North 
Georgia and at Dalton State College in Dalton, 

GA. At the roundtables, hundreds of investors, 
advocates, investigators, and regulators shared 
their experiences with investments, policy and 
regulation, securities fraud, and engaged with the 
Chair and Commissioners, Division and Office 
directors, and senior staff related to identifying 
fraud and avoiding suspicious investments.

INTERAGENCY SECURITIES COUNCIL
The Interagency Securities Council (“ISC”)13 is a 
joint task force that invites federal, state, and local 
regulatory and law enforcement professionals to 
meet quarterly to discuss the latest in scams, trends, 
frauds, and mitigation strategies, and provides 
briefings on emerging and complex topics. 

The ISC’s objective is to strengthen the cohesion 
between federal, state, and local agencies, enhance 
opportunities to collaborate on cases to protect 
investors, provide insight and guidance across the 
ecosystem for investigators who may not frequently 
operate in the securities space, and creates a 
forum for unified efforts in combating financial 
fraud. Chaired by the Director of the Division 
of Enforcement, the OIAD Investor Engagement 
Manager envisioned, developed, and leads the 
SEC’s efforts on the Council.

FIGURE 2. Phases of Investor Engagement

PHASE 1
Active listening

PHASE 2
Research and  
data analysis

PHASE 3
Collaboration and 

partnerships

PHASE 4
Decision-useful 

feedback to SEC 
leaders

PHASE 5
Integration into 
SEC Policies and 

Practices



R E P O R T  O N  A C T I V I T I E S :  F I S C A L  Y E A R  2 0 2 4   |   7

The ISC is limited to law enforcement and 
regulatory agencies, and now includes nearly 
2,000 representatives from more than 250 
departments and agencies14, including federal 
financial and law enforcement agencies, state 
offices of attorneys general and state police, state 
securities regulators, and local police departments 
and sheriff’s offices. Members participate in 
discussions with experts on emerging threats, hear 
from investigators conducting and supervising 
investigations, and explore case study examples 
of agencies employing innovative approaches to 
combat financial fraud. The ISC also serves as 

an opportunity to connect and share information 
with the larger law enforcement community that 
less frequently deals with securities law violations, 
such as police/sheriff departments and tribal- and 
military-community law enforcement. 

In FY 2024, the ISC conducted meetings and 
specialized briefings with other agencies, such as 
a briefing on the use of deepfakes and artificial 
intelligence in financial frauds with the SEC’s 
Event and Emerging Risks Team, the FBI’s 
Complex Financial Crimes unit, and the Central 
Intelligence Agency. 

FIGURE 3. Investor Groups Represented

OIAD 
Engagement

Retail  
Investors

Financial Industry 
Representatives

Students and Young 
Professionals

Businesses and 
Capital Seekers

Pension Plans and 
Public Retirement 

Systems

Academic and 
Advocacy Groups

Legal 
Representatives

Institutional 
Investors



8  |   O F F I C E  O F  T H E  I N V E S T O R  A D V O C AT E

LOOKING AHEAD
In FY 2025, OIAD operations will remain robust; 
with plans to continue engaging directly with retail 
investors through investor-focused meetings, events, 
activities, and roundtables, and by continuing to 
partner with other federal, state, and local agencies 
on issues relating to retail investors. 

Through these, and additional activities and 
strategies, OIAD will continue to include investor 
voices from the whole community in policy, 
practice, and advocacy. 

DIVISIONS AND OFFICES. Investor Roundtable

Atlanta Regional Office Director Nekia Hackworth Jones and then Division of Enforcement Director Gurbir 
Grewal at the Joint Investor Roundtables at the University of North Georgia and Dalton State College



R E P O R T  O N  A C T I V I T I E S :  F I S C A L  Y E A R  2 0 2 4   |   9

FIGURE 4. Lists of Certain Problems Encountered by Investors During Fiscal Year 2024

Reported 
potentially 

problematic 
products or 

practices

SEC15

•	 Relationship Investment Scams 
•	 Exchange-Traded Products (ETPs) 

Providing Access to Ether and Bitcoin 
•	 Fake Form 4 Filings 
•	 Accidental Text Messages on Social 

Media Platforms 

•	 Generation of excitement around 
emerging AI technology and 
deploying bots 

•	 Advertisements of certificate of 
deposit accounts with supposed 
high-yields 

•	 Leverage and Inverse ETFs

NASAA16

•	 Digital Asset Frauds 
•	 "Pig Butchering" Schemes 
•	 Social Media & Internet Schemes

FINRA17

•	 Phantom Riches
•	 Social Consensus
•	 Source Credibility

•	 Scarcity
•	 Reciprocity

PCAOB18

•	 Proof of Reserve Assertions
•	 High Audit Deficiency Rates
•	 Recurring Quality Control Deficiencies

ADVOCACY FOR INVESTORS

T his section of our annual Report on 
Activities describes a selection of our 
policy activities on behalf of investors 
for the period from October 1, 2023 

through September 30, 2024 (the Reporting 
Period). 

PROBLEMS ENCOUNTERED BY 
INVESTORS
Pursuant to Exchange Act Section 4(g)(6)(B)(III), 
we are required to provide a summary of the most 
serious problems encountered by investors during 
the prior fiscal year. In addition, the illustration 

below summarizes some of the other serious 
problems that investors have encountered during 
Fiscal Year 2024, based on our consultation with 
sources both within and outside the Commission.

Each of the products and practices listed below 
represents an area of concern for investors during 
the Reporting Period. OIAD communicates 
regularly with various Divisions and Offices within 
the Commission, including with the Division of 
Enforcement, the Division of Examinations, and 
the Office of Investor Education and Advocacy 
(OIEA), among others, to gain awareness of the 



10  |   O F F I C E  O F  T H E  I N V E S T O R  A D V O C AT E

problematic products and practices that such 
Divisions and Offices may discern in the course 
of their work. The Office also maintains regular 
communications with other regulators, such as 
Financial Industry Regulatory Authority (FINRA), 
NASAA, Public Company Accounting Oversight 
Board (PCAOB), and the Municipal Securities 
Rulemaking Board (MSRB) to maintain visibility 
into problematic products and practices that those 
regulators have confronted in their day-to-day 
responsibilities during the reporting period.

Focus on Complex Investment Fraud
Public trust in the integrity of the securities markets 
is necessary for our capital markets to thrive. 
Investors are not required, however, to take a leap 
of faith by allocating their savings to the capital 
markets without a basis for trust in those markets. 
For decades, regulatory examination regarding, 
and enforcement of, our federal and state securities 
laws and rules have worked to instill that trust. 
This financial regulatory structure is designed to 
help protect investors and lower the cost of capital 
raising, benefitting market participants and the U.S. 
economy as a whole.

Unfortunately, investors who experience 
investment fraud, manipulation, or abuse often 
lose twice. First, having trusted a bad actor, such 
as a dishonest financial representative or an 
unregistered adviser, these investors may suffer the 
loss of some or all of their hard-earned savings. 
Second, they may experience a loss of confidence 
in the securities markets. With personal investment 
decisions becoming much more important to 
the well-being of Americans looking to save 
for retirement, the purchase of a home, or their 
children’s education, the loss of confidence in the 
securities markets can compound the damage 
already inflicted upon them by an unscrupulous 
financial representative or a criminal pretending 
to be a legitimate adviser. By retreating from the 

securities markets, investors who stow their money 
under the proverbial mattress may keep their funds 
safe from con artists, but those funds will not grow 
in value and, in fact, will lose buying power over 
time due to inflation.

Because of the foregoing considerations, our Office 
has focused on the problem of complex investment 
fraud over the last year and will continue to do 
so for the foreseeable future as these fraudulent 
schemes proliferate and gain momentum. Directly 
below, we discuss the highlights from our ongoing 
review of relevant news and reports, insights into 
new trends and growing complexity in the markets, 
and how our Office expects to address these 
developments. In the Ombuds’ Report, a deeper 
examination is provided of how investment fraud 
schemes currently threaten investors. 

Investment Fraud Trends
As noted in our last report to Congress, investment 
fraud continues to beleaguer contemporary 
investors, securities markets, and law enforcement. 
While investment fraud itself is not new, the 
methods used to commit such fraud constantly 
evolve, and as noted below in the Ombuds’ Report, 
our Office has experienced a recent surge in fraud 
complaints. Multiple government agencies, here 
and abroad, have recently also reported an increase 
in fraud generally. 

A common element in these reports, including 
complaints to our Office, is the role advanced 
technologies play in facilitating complex fraud. It 
is important to acknowledge that technological 
advancements are opening doors for new 
populations of investors to participate in the 
markets and build wealth. Additionally, innovative 
new financial products are allowing retail investors 
to access complex investment strategies previously 
reserved for sophisticated institutional investors. 
For some individuals who wish to invest in 



R E P O R T  O N  A C T I V I T I E S :  F I S C A L  Y E A R  2 0 2 4   |   11

innovative products, the features of developing 
or emerging technologies may themselves be the 
impetus for becoming an investor. For instance,  
“the use of digital ledger technology (DLT) may 
have the potential to foster financial innovation, 
increase efficiencies, and improve access to 
financial products, services, and activities.”19

These same advancements, however, enable 
criminals to deepen the pool of potential fraud 
victims. Evolving technology has made deception 
more challenging for investors to recognize. 
Technological advancements further provide 
criminals with the tools to communicate more 
effectively, scale their schemes more rapidly 
than before, and conclude their frauds through 
effectively unrecoverable payments. Alarmingly, 
investment fraud enabled by technology is 
accelerating at a scale and complexity not 
previously possible to accomplish even a year ago.

Given this new reality, it may be challenging to 
see through scams, especially when legitimate 
investment products and services have become 
increasingly complex and harder to understand. 
If it is difficult for investors to digest lawful, yet 
complicated disclosures, the resulting opaqueness 
can widen the window of opportunity for criminal 
behavior to occur.

Technology also permits fraudulent schemes to 
proliferate much more rapidly than in the past. 
As the Commission noted in a recent rulemaking 
proposal, “due to the scalability of [predictive data 
analytics (PDA)] technologies and the potential for 
firms to reach a broad audience at a rapid speed . . . 
any resulting conflicts of interest could cause harm 
to investors in a more pronounced fashion and on a 
broader scale than previously possible.”20 Although 
the Commission’s proposal was focused on the use 
of PDA technologies by firms acting lawfully and in 
good faith, its statements about the rapid scalability 

of harm associated with advanced technologies is 
relevant to bad actors as well.

While we acknowledge that investing in crypto 
assets may represent an entry point into investing 
for many investors, the Ombuds’ Report below 
details how evolving technologies, such as crypto-
related payments and social media has led to an 
increase in fraudulent schemes reported to the 
Ombuds. Beyond the Ombuds and within the SEC, 
OIEA has reported a similar increase in the number 
of complaints related to crypto-related investments. 
In its annual list of Ten Most Common Complaints, 
OIEA reported receiving 1,075 in fiscal year 
2020,21 4,599 in fiscal year 2021, 5,040 in fiscal 
year 2022, and 5,357 crypto-related complaints in 
fiscal year 2023.22 OIEA has published an Investor 
Alert warning that fraudsters are targeting victims 
by offering crypto related investments.23 While 
some fraud is committed using schemes wherein 
the underlying crypto-related investment itself is 
illegitimate, the vast majority of these fraudsters 
are simply using crypto-related payments as an 
enabling tool. Similarly, the SEC’s Office of the 
Inspector General has recently highlighted the 
challenges in protecting investors from crypto-asset 
related fraud.24

The SEC’s Investor Advisory Committee has also 
expressed concern about digital-asset based fraud, 
and the semi-anonymous and borderless nature of 
crypto transactions that make them well-suited for 
various illegal activities such as money-laundering 
and tax evasion.25

Beyond the SEC, other regulators are also reporting 
a significant increase in crypto-related complaints. 
For instance, in its Cryptocurrency Fraud Report 
for 2023, the Federal Bureau of Investigations 
(FBI) Internet Crime Complaint Center (IC3) 
reported receiving 69,468 complaints from the 
public regarding cyber-enabled crime and financial 



12  |   O F F I C E  O F  T H E  I N V E S T O R  A D V O C AT E

fraud involving the use of crypto, with over 
$5.6 billion in reported losses, constituting a 45 
percent increase in reported losses since 2022. 
Losses from cryptocurrency-related investment 
fraud schemes reported to IC3 rose $2.57 billion 
in 2022 to $3.96 billion in 2023, an increase of 
53%. Many individuals reported accumulating 
massive debt to cover losses from these fraudulent 
investments. Additionally, of the complaints 
submitted to the FBI IC3, the exploitation of crypto 
was most pervasive in investment scams, where 
losses accounted for 71 percent of all losses related 
to crypto.26

Similarly, the Federal Trade Commission (FTC) 
reported an increase in the amount that consumers 
reported losing to fraud, $10 billion in overall 
losses in 2023. The FTC also reported an increase 
in the amount that consumers lost to investment 
scams, with a 21 percent increase from 2022 
to 2023, and a reported loss of $4.6 billion in 
2023. 27 The second highest reported loss amount 
came from imposter scams, with losses of nearly 
$2.7 billion reported. Moreover, in its 2024 
Report on Protecting Older Consumers, the FTC 
acknowledged that underreporting results in an 
incomplete picture of the scale of the problem. 
The FTC estimated that overall losses due to 
fraud in 2023, adjusted for underreporting, was 
“$158.3 billion or $23.7 billion for consumers of 
all ages and $61.5 billion or $7.1 billion for older 
adults.”28 The FTC explained that those estimates 
are based on two different assumptions about the 
degree of underreporting for high dollar losses. 

Separate from crypto-related investment fraud, 
the SEC’s OIEA, NASAA, and FINRA have all 
warned investors that bad actors are using the 
growing popularity and complexity of AI to lure 
victims into scams.29 The FBI has noted that “AI 
provides augmented and enhanced capabilities to 

schemes that attackers already use and increases 
cyber-attack speed, scale, and automation.”30 The 
National Security Agency (NSA), the FBI, and the 
Cybersecurity and Infrastructure Security Agency 
(CISA) warn that “[m]alicious actors, many of 
them likely cyber criminals, often use multiple 
types of manipulated media in social engineering 
campaigns for financial gain. These may include 
impersonating key leaders or financial officers 
and operating over various mediums using 
manipulated audio, video, or text, to illegitimately 
authorize the disbursement of funds to accounts 
belonging to the malicious actor.”31  Fraudsters 
also may use AI technology to produce realistic 
looking websites or marketing materials to 
promote investment scams, or deepfakes to 
deceive investors.32

On a global level, as INTERPOL notes in its recent 
Global Financial Fraud Assessment: “Within 
financial fraud, technology has emerged as the 
key enabling factor for criminal groups . . . The 
use of artificial intelligence, large language models 
and cryptocurrencies combined with phishing-and 
ransomware-as-a-service business models have 
resulted in more sophisticated and professional 
fraud campaigns without the need for advanced 
technical skills, and at relatively little cost.”33 

Additionally, the World Economic Forum, in 
its The Global Risks Report 2024, reports that 
“easy-to-use interfaces to large-scale artificial 
intelligence models have already enabled an 
explosion in falsified information and so-called 
‘synthetic’ content, from sophisticated voice cloning 
to counterfeit websites.” 34 The World Economic 
Forum also ranks AI-generated “misinformation 
and disinformation” as the second highest risk 
“likely to present a material crisis on a global scale 
in 2024.”35 



R E P O R T  O N  A C T I V I T I E S :  F I S C A L  Y E A R  2 0 2 4   |   13

As the use of crypto payments in the global 
financial system continues to increase, our Office 
will continue to pay close attention to the issues 
surrounding digital asset-based fraud and the 
technologies that are used to perpetrate those 
frauds. Our Office will also continue to work with 
our SEC colleagues to encourage that disclosures 
related to complex investment products and 
services are presented in a manner that retail 
investors can more easily digest. Conducting 
investor testing on proposed financial disclosures 
and continuing to strive for greater comprehension 
of those disclosures, may help retail investors better 
understand their legitimate investment choices, 
potentially reducing the opaqueness that criminals 
currently exploit to their advantage.

More generally, complex investment fraud will 
remain a key area of focus of our Office moving 
forward, given the billions in investor losses. We 

will maintain our outreach efforts to investors 
(particularly retail investors), financial regulators, 
market participants, and other stakeholders in 
an effort to better evaluate the myriad issues 
associated with investment fraud today. We will 
continue to explore ways to deter investment 
fraud and financial exploitation from occurring in 
the first place, as well as possible approaches to 
assisting the victims of fraudulent schemes more 
effectively after the fraud has occurred. We will 
continue to evaluate pending legislative proposals 
in Congress that relate to investment fraud 
and analyze their potential impact on investors 
and consider whether there may be a need for 
additional resources, or ways to deploy existing 
resources more productively, in countering 
investment fraud. Last, we strongly encourage 
the greatest possible collaboration among law 
enforcement agencies to combat investment fraud.



14  |   O F F I C E  O F  T H E  I N V E S T O R  A D V O C AT E

RESEARCH AND  
INVESTOR TESTING

T he Office of Investor Research (OIR) is 
a multidisciplinary research group that 
serves investors by identifying, analyzing, 
and addressing investors’ concerns. 

Through its role as part of the OIAD, OIR’s 
research on investor behavior and decision making 
provides an empirical basis for policy decisions, 
OIAD priorities, and SEC activities, ultimately 
helping investors succeed. 

OIR provides insights on how investors and 
other stakeholders interact with the investment 
marketplace and how they are affected by SEC 
policy. OIR enables OIAD and the Commission to 
more thoroughly:

1.	 “Identify areas in which investors would 
benefit from changes in the regulations of the 
Commission or the rules of self-regulatory 
organizations;”36

2.	 Test potential policies before adoption, 
identifying areas in which investors would 
benefit from changes in regulation and allowing 
the Commission to “analyze the potential 
impact on investors of proposed regulations 
of the Commission. . . proposed rules of 
self-regulatory organizations . . . and . . . to the 
extent practicable, propose to the Commission 
changes in the regulations;”37

3.	 Conduct “retrospective analysis of rules” 
to help ensure that policies are working as 
intended;38

4.	 Study investor behavior and outcomes to 
“identify problems that investors have with 
financial service providers and investment 
products;”39 and

5.	 Generate evidence of organizational 
management and efficacy, particularly 
regarding “outcome” performance indicators.

To accomplish these aims, OIR draws on deep staff 
expertise from fields including economics, finance, 
psychology, and judgment and decision-making. 
OIR staff are recognized experts in these fields who 
have published over 60 peer-reviewed journal 
articles or book chapters and have presented 
research at more than 100 conferences during their 
careers. Despite having a team of only five full-time 
Ph.D. researchers, OIR’s team provides the SEC 
with expertise across broad subject matter and 
methodological areas.

Through the Policy-Oriented Stakeholder and 
Investor Testing for Innovative and Effective 
Regulation (POSITIER) initiative,40  OIR’s founding 
architecture, OIR uses its expertise for long-term 
research projects of fundamental importance and 
applied, collaborative projects with SEC teams 
to inform policymaking. In these endeavors, OIR 
designs bespoke research using a variety of research 
methods, drawing on extensive experience with 
econometric modeling, natural language processing, 
text analysis, experimental design, survey methods, 
survey sampling, qualitative interviews, and other 
state-of-the-art research methods. Further, projects 
are designed to be rapid and cost-effective. 



R E P O R T  O N  A C T I V I T I E S :  F I S C A L  Y E A R  2 0 2 4   |   15

FY 2024 was OIR’s most productive year in terms 
of data collection: we completed 21 distinct survey 
projects and three qualitative studies. Adding this 
work to our past efforts, OIR has conducted a total 
of 71 surveys or experiments, 18 qualitative 
studies, and several analyses of market data over its 
lifetime (since June 2017). Multiple rulemaking 
documents cite our research, thereby impacting the 
investing public. Additionally, we engage in 
thought leadership to policy and academic 
communities, encouraging others to serve investor 
interests through advocacy, research, or direct 
outreach. 

In FY 2024, highlights of our research group 
included:

	� Establishment of the nationally representative 
THRIVE survey panel to help OIR contact 
investors in a timely, cost-effective manner. 
In the first quarter of FY 2024, we launched 
the nationally representative Thoughtful 
Households Relating InVesting Experiences 
(THRIVE) Panel to facilitate frequent, direct 
survey outreach with the public. THRIVE is 
a platform to help OIR conduct surveys that 
provide timely data on investment-related 
topics, and investor testing projects to inform 
SEC rulemaking and long-run research 
priorities. THRIVE was established to increase 
the efficiency of OIR’s data collection efforts, 

an initiative that has already yielded results. In 
part thanks to THRIVE, we had 57,855 total 
investor contacts in FY 2024, representing more 
than 4 times the number of investor contacts 
in FY 2023.

	� A rigorous research project on registered 
investment company fee meters to affect a 
potential rulemaking proposal. In conjunction 
with the SEC’s Division of Investment 
Management, OIR conducted research 
examining graphical displays of mutual fund 
expense ratios, known as “fee meters.” This 
project built on OIR’s published research, 
discussed in the OIAD’s FY 2022 Report on 
Activities,41 demonstrating that prototype fee 
meters could help investors viewing a set of 
index funds allocate a higher proportion of their 
hypothetical investment balance to lower-cost 
funds, thereby avoiding unnecessary fees. In 
the current work, we examined the effects of 
a fee meter when investors view a single fund, 
measuring potential impacts on knowledge 
of relative costs, evaluations of the fund, and 
interest in seeing an alternative mutual fund. 
This project highlights the value of long-run, 
iterative investor testing projects, with research 
leading to better-informed potential rulemaking 
activities.

	� A novel research project on the measurement 
of investor time horizons to understand factors 
driving reported time horizons. Financial time 
horizons are a key component of the financial 
advice that investors receive from financial 
advisers and brokers. Financial advisers and 
brokers often collect an investor profile to 
determine the best investment strategy for 
their clients, and according to regulatory 
interpretation by the SEC, the investor profile 
should include questions to understand 
the client’s time horizons.42 We show that 
seemingly minor variation in the response 

Qualitative
18

Quantitative
71

Over 4X  more investor 
contacts than the previous year



16  |   O F F I C E  O F  T H E  I N V E S T O R  A D V O C AT E

options shown on time horizon questions can 
dramatically affect investors’ answers, changing 
the proportion who appear to have a long-run 
or short-run time horizon for their financial 
goals. This project expands OIR’s research on 
financial advice and raises questions about the 
consistency of existing time horizon elicitations, 
with likely downstream consequences for the 
quality of advice investors receive.

§	Dissemination of investor-related research in 
multiple communities, including through the 
Boulder Summer Conference on Consumer 
Financial Decision Making, the RAND 
Behavioral Finance Forum, and the Current 
Innovations in Probability-based Household 
Internet Panel Research (CIPHER) Conference. 
These discussions help increase OIR’s impact by 
raising awareness of our research, generating 
additional interest about investor issues among 
researchers and policymakers, and identifying 
areas of future research.

As always, OIR is aware that making financial 
decisions and achieving financial security 
remain difficult for many. We will continue 
to pursue research to help the public to make 
better investment decisions and avenues for OIR 
to collaborate with SEC staff on high-impact 
projects. We anticipate continued work on specific 
research areas that would benefit from additional 
attention: financial product information and 
disclosure; provision of financial advice or related 
communications; and investor participation, 
perception, and decision-making in an evolving 
economic environment. The rest of this year’s 
report on investor testing presents additional details 
about our highlighted research projects. 

A NEW SURVEY PANEL TO IMPROVE 
OUR UNDERSTANDING OF INVESTOR 
BEHAVIOR AND DECISION MAKING

In the first quarter of FY 2024, we launched 
the Thoughtful Households Relating InVesting 
Experiences (THRIVE) Panel. OIR established 
THRIVE to facilitate frequent, direct survey 
outreach with the general public.43 THRIVE is 
a platform to help OIR conduct two primary 
activities: surveys that provide timely empirical data 
on investment-related topics, and investor testing 
projects to inform SEC rulemaking and long-run 
research priorities. As part of THRIVE quarterly 
surveys, the same 7,500 people are invited to 
answer recurring questions on investment decisions 
and household events, as well as novel questions 
examining contemporaneous areas of interest. 
For investor testing, THRIVE respondents (or 
subsamples of respondents) participate in custom 
projects designed by OIR to address rulemaking 
proposals or other key SEC policy needs. THRIVE 
is representative of the overall US population, with 
oversamples based on race and ethnicity to allow 
for subgroup analysis.R E P O R T  O N  A C T I V I T I E S :  F I S C A L  Y E A R  2 0 2 4   |   17

Goals of THRIVE
OIR created THRIVE as a nationally representative 
survey panel focused on investing and the policy 
interests of OIAD and the SEC. To that end, 
THRIVE surveys include content reflecting OIAD 
priorities, including (1) the content, presentation, 
and manner of delivery of financial product 
information; (2) investor experiences related 
to the provision of financial advice and related 
communications; and (3) investor participation, 
perception, and decision-making in an evolving 
economic environment. 

THRIVE addresses OIR research needs in 
five important ways (Figure 5). First, a key 
responsibility of OIR is to conduct investor testing 
to support rulemaking. THRIVE facilitates online 
surveys, allowing respondents to view realistic 
sample elements of proposed disclosures, such as 
new text and visuals. Second, financial market 
events and policy interests can move quickly. 
THRIVE is designed so that OIR’s research 
can respond rapidly to time-sensitive requests, 
including from the SEC and Congress. An online 

standing panel allows us to identify respondents 
who would be suitable to meet current research 
needs and launch studies within a matter of 
weeks, not months. Third, the SEC is interested 
in understanding how investor behavior changes 
over time. By surveying the same people over 
time, we observe individual transitions (e.g., when 
a non-investor becomes an investor). Fourth, 
THRIVE’s panel structure—that is, returning to 
the same people over time rather than surveying 
new people each round—allows OIR to create and 
track repeated measures over time. Fifth, THRIVE 
provides a cost-effective way to meet OIR’s 
research needs. Linking an individual’s responses 
over time increases efficiency and reduces costs 
because relevant individuals can be targeted for 
surveys based on historical responses. Additionally, 
stable constructs that are used in many studies can 
be measured less frequently. As an example, the 
RILA research described in the Report on Activities 
for FY 202344 could have benefited from THRIVE, 
as it would have allowed us to identify potential 
respondents based on their annuity ownership 
and draw on previously measured constructs such 

FIGURE 5. Why did we develop THRIVE? 

Investor testing to support rulemaking

Ability to respond to time-sensitive 
research needs

Study within-household shocks and 
changes

Creation of metrics

Cost-effective

Online surveys allow us to test disclosures, showing 
respondents text and visuals.

Quick survey delivery because we have already 
identified a sample suitable for many research projects.

By surveying the same people over time, we observe 
individual transitions.

By asking a repeating set of questions, we 
can reliably track trends and developments.

Linking responses over time increases efficiency and 
reduces costs. 



18  |   O F F I C E  O F  T H E  I N V E S T O R  A D V O C AT E

as financial literacy. “Sampling” (i.e., identifying 
specific people to survey) typically represents 
a large proportion of the total time and costs 
required to field a nationally representative survey. 
With THRIVE, we created a reusable sample, 
mitigating many of the costs associated with survey 
research.

THRIVE Builds on OIR’s Experience and 
Expertise
THRIVE draws on the OIR team’s combined 
research experience and expertise (Figure 6). 
OIR staff have dedicated their careers to 
studying financial decision making; however, 
developing a panel requires additional expertise. 
Over their careers, the OIR team has developed 
hundreds of surveys and experiments. To develop 
survey questions, OIR draws on best practices 
for measuring key concepts and testing new 
questions, including conducting qualitative 
interviews to better understand how respondents 
understand survey questions. OIR also has 
experience with statistical methods, such as 
development of survey weights that are used to 
address any imbalances in the representativeness 
of the panel (for example, those introduced 
by oversamples based on race and ethnicity). 

Finally, members of the OIR team have over 
10 years of experience with panel management, 
which provides us with expertise in all aspects 
of designing and maintaining a panel, including 
recruiting and retaining participants, analyzing 
potential statistical biases related to drop-out, 
protecting respondents’ privacy, and determining 
whether participants’ responses are conditioned 
by repeated surveys.

Types of Surveys
THRIVE consists of three types of surveys: 
baseline surveys, quarterly surveys, and custom 
investor testing surveys. Survey content is selected 
and ordered to minimize respondent burden, 
where possible. 

There were two baseline surveys fielded in the fall 
of 2023. These baseline surveys were designed 
to provide an initial, thorough view of key 
investor behaviors and characteristics as well as 
fixed characteristics that are unlikely to change 
considerably over time. Baseline survey data 
provides ongoing value to the SEC by allowing 
surveys to be sent specifically to individuals 
with certain characteristics, ensuring future data 
collection is cost-effective. 

FIGURE 6. How Staff Expertise Contributes to THRIVE

•	 Financial decision making

•	 Survey development

•	 Experimental design

•	 Qualitative interviewing

•	 Statistical weighting

•	 Panel management

OIR STAFF EXPERTISE

THRIVE



R E P O R T  O N  A C T I V I T I E S :  F I S C A L  Y E A R  2 0 2 4   |   19

Following the baseline surveys, OIR started 
quarterly THRIVE surveys in January 2024. There 
are two sections to each quarterly survey. The first 
section contains key recurring content, including 
investment behaviors in the preceding 90 days and 
measures of current financial status. The second 
section changes across quarters and includes 
questions to provide a deeper understanding of 
a given individual’s responses, or to measure 
concurrent topics of interest. This latter section 
can also include one-time modules to measure 
relatively stable individual characteristics that 
were not included in previous surveys. 

In addition to baseline and quarterly surveys, 
THRIVE can be used for custom investor testing 
surveys. These surveys can take many forms but 
may be used inform policy making, improve 

research methods, or examine other areas of 
long-term interest. 

Who is Included in THRIVE
Most THRIVE surveys, including the quarterly 
surveys, invite the same 7,500 people to respond. 
Participation rates are generally high, with 
approximately 6,000 people participating in each 
survey. This group includes both investors and 
non-investors, allowing us to monitor investor 
behavior, barriers to investing, and the transition 
from non-investor to investor. The THRIVE sample 
also oversamples Black, Hispanic, and Asian 
adults to ensure that we can accurately measure 
differences in behavior across these groups.45 
Figure 7 illustrates the demographic characteristics 
of the THRIVE panel.

FIGURE 7. Summary of THRIVE Participant Demographic Characteristics 

9.4% Less than high school

28.8% High school or equivalent

27.9% Some college/associates degree

20.2% Bachelor’s degree

EDUCATION

13.6% Post grad study/professional degree

49.8%50.2%
MALEFEMALE

AGE

20%

15%

10%

5%

0%

12.8%

18.8% 18.3%

14.3%

18.5%

12.0%

5.3%

18-24 55-6425-34 65-7435-44 75+45-54

RACE/ETHNICITY

8.0%  �Asian-Pacific Islander, 
non-Hispanic

1.4%  �Two or more, 
non-Hispanic

0.6%  Other, non-Hispanic

57.4%  White, non-Hispanic

19.9%  Hispanic

12.7%  Black, non-Hispanic

GENDER



20  |   O F F I C E  O F  T H E  I N V E S T O R  A D V O C AT E

Initial Lessons from THRIVE
Since launching THRIVE in October 2023, 
seven surveys have been fielded on the THRIVE 
panel. These surveys have contributed to 
ongoing research and to our understanding of 
key investment behaviors. Figure 8 illustrates 
several of the measures that we are tracking each 
quarter, weighted to be representative of the U.S. 
population. 

We find that over 60% of U.S. adults report having 
a retirement account, over 35% report owning a 
brokerage account, and approximately 10% report 
owning crypto currency, as shown in the top panel 
of figure 8. Overall, 70% report having one or 
more of these financial investments. These numbers 
are similar to those found in other nationally 
representative surveys. The Federal Reserve’s 2022 
Survey of Consumer Finance found that 54.4% 
report having retirement accounts.46 The FINRA 
2021 National Financial Capability Study found 
that 36% have brokerage accounts.47 The Federal 
Reserve’s 2023 Survey of Household and Economic 
Decisionmaking found that 6.7% reporting owning 
or buying cryptocurrency in the last year,48 while 
Pew Research reported in 2023 that 17% had ever 
owned cryptocurrency.49 

Because THRIVE surveys the same people multiple 
times a year, we are able to better understand 
changes in ownership over time. While the overall 
numbers suggest stability in overall ownership rates, 
they mask underlying changes in who owns each 
type of investment. As an example, over 15% of 
people who report owning cryptocurrency in April 
2024 do not report owning cryptocurrency three 
months later, in the July 2024 quarterly survey. 
There are similar numbers of people opening 
new accounts, highlighting a key benefit of panel 
data: the ability not only to observe levels but also 
changes in ownership. Further research is needed to 
understand whose ownership is changing, and the 
reasons behind these shifts. 

FIGURE 8. Recent Results from THRIVE panel

Last Sale of a Financial Investment 

Jan.
Survey

JulApr

7.5%

5.0%

2.5%

0.0%

P
ro

p
o

rt
io

n 
o

f U
.S

. P
o

p
ul

at
io

n

Last 30 Days 30 to 90 DaysToday

Last Purchase of a Financial Investment 

Jan.
Survey

Apr Jul

20%

15%

10%

5%

0

P
ro

p
o

rt
io

n 
o

f U
.S

. P
o

p
ul

at
io

n

Figures show the proportion of the U.S. 
population buying or selling in each of the 
THRIVE quarterly surveys.

Retirement Account

Crypto Currency Any Account

Brokerage Account

Percent of U.S. Population with  
Different Investment Types

Jan 2024 Apr 2024
Survey

Jul 2024

75%

50%

25%

0

P
ro

p
o

rt
io

n 
o

f U
.S

. P
o

p
ul

at
io

n



R E P O R T  O N  A C T I V I T I E S :  F I S C A L  Y E A R  2 0 2 4   |   21

Another way of exploring ongoing investment 
behavior is to examine purchases or sales of assets 
in the last 90 days (Figure 8). In each of the surveys 
shown, approximately one quarter of the U.S. 
population reports purchasing a financial asset in 
the last 90 days, and approximately 10% report 
selling an asset in the last 90 days. The share 
purchasing assets almost certainly understates 
ongoing new contributions to retirement accounts 
through payroll deduction. Financial asset owners 
and purchasers include people from all walks of 
life; THRIVE is allowing OIR to better understand 
the behaviors of investors and non-investors alike.

The Future of THRIVE 
THRIVE provides OIR with a valuable tool for 
monitoring investor behavior and conducting 
investor testing. As a custom SEC resource, 
THRIVE is designed specifically to yield insights 
across the agency. Partially due to efficiencies 
gained by THRIVE, we had more than 4 times 
the number of investor contacts in FY 2024 as 
FY 2023. THRIVE provided data that contributed 
to our study of fee meters, discussed further below, 
and the measurement of key investor behaviors. 
OIR will continue to delve into these rich data to 
deepen our understanding of investor behavior and 
decision making. 

The value of THRIVE multiplies over time as we 
conduct interesting analyses across surveys and add 

future content. For instance, we can link data on 
asset ownership with major household events, or 
link information on investment advice and mutual 
fund knowledge to study the relationship between 
financial advice and beliefs about mutual fund fees. 

THRIVE is more efficient than recruiting new 
respondents from scratch; however, it requires 
maintenance. Quarterly data collection means 
OIR staff must engage frequently to ensure that 
surveys are responsive to emerging SEC and OIAD 
needs. OIR must retain specialized staff to ensure 
continued quality of THRIVE, with required 
expertise spanning both substantive fields and 
methodological training. Ensuring that THRIVE 
can continue to provide benefits to the SEC will 
require sufficient funding and staffing in the years 
to come.

INVESTOR TESTING ON  
MUTUAL FUND FEE METERS
Mutual fund fee dispersion raises recurring 
policy and academic concerns about whether 
investors are paying too much for mutual funds. 
Over the past several years, OIR has tested 
various disclosures of mutual fund fees designed 
to make consumers aware of the importance of 
fees and improve their decision making about 
investments. In our 2022 annual report, we 
described this work, which was subsequently 
published in the Journal of the Association for 
Consumer Research in 2023.50 In FY 2024, we 
continued this line of research through new 
testing exploring the effects of a mutual fund 
“fee meter.”51 The goal of a fee meter is to help 
investors compare fees across funds with similar 
objectives. Our testing uses no load mutual 
funds, so the only fees and costs are those 
reflected in the expense ratio (the percentage of 
an investor’s assets under management that the 
investor has to pay to the mutual fund company 
annually).



22  |   O F F I C E  O F  T H E  I N V E S T O R  A D V O C AT E

Background on Price Dispersion and 
Potential Benefits of Shopping
The mutual fund market is characterized by 
significant price dispersion—that is, some 
funds are more expensive than others—even 
when accounting for differences in investment 
strategy and risk. Indeed, we found that the fees 
on no-load non-institutional share classes for 
S&P 500 mutual funds in 2023 ranged from 
0% to 1.61% per year (as shown in Figure 9), 
a pattern that has been demonstrated in past 
research studying historical dispersion in fees for 
S&P 500 index funds.52 There is also significant 
fee dispersion within and across broader sets of 
mutual funds.53

It is important for investors to understand price 
dispersion in the mutual fund market so that 
they can make informed decisions about mutual 
funds. In particular, price dispersion across a set 
of funds that have a similar investment strategy 
and risk profile suggests that consumers who 
search the mutual fund market may find lower cost 
alternatives. Especially in the case of index funds, 
that seek to track the returns on an index such as 
the S&P 500, lower cost alternatives can provide 
investors an unambiguous financial benefit.

If the S&P 500 index rises by 10% in a given year, 
a high-fee S&P 500 mutual fund (with an expense 
ratio of 1.05%) would earn about 8.95% that 
year, whereas a low-fee fund (with an expense 
ratio of 0.14%) would earn about 9.86% that 
year. In subsequent years, investors remaining in 
the high-fee fund could forgo additional earnings 
on the money lost to fees, meaning that differences 
due to fees would compound over time. Continuing 
with our example of a 1.05% expense ratio fund 
and a 0.14% expense ratio fund, Figure 10 shows 
the difference in returns for a $10,000 investment 
over 10 years assuming an annual return of 10%. 
While the difference between these two investments 
is only $91 after the first year, after 10 years the 
difference is nearly $2,000.

Given this background, spurring investors to search 
for less expensive funds could save them significant 
amounts of money. Past research conducted by 
OIR54 suggests that fee meters may help consumers 
choose among a group of mutual funds, but did 
not explore whether providing such information 
for a single fund improves consumers’ knowledge 
of relative costs and helps them decide when it is 
in their interest to search for a cheaper fund. The 
current research addresses those gaps.

FIGURE 9. Distribution of Expense Ratios for S&P 500 Index Funds on the Market

6

5

4

3

2

1

0

0.0% 0.5% 1.0% 1.5%

N
um

b
er

 o
f s

ha
re

 c
la

ss
es

This figure shows the distribution of expense ratios for no-load, non-institutional share classes of S&P 500 index 
mutual funds, with each share class included separately, as of November 2023.



R E P O R T  O N  A C T I V I T I E S :  F I S C A L  Y E A R  2 0 2 4   |   23

Lesson 1. People Don’t Understand the 
Relative Cost of Fees 
Our research first sought to establish whether 
people are aware that a given mutual fund fee is 
relatively high or low. Each person viewed the 
expense ratio for one of four S&P 500 index funds, 
which varied in terms of their fees. Specifically, 
they were shown funds with an expense ratio of 
0.08%, 0.32%, 0.48%, or 0.49%. They were 
then asked to estimate the percent of similar funds 
that had a lower fee. Figure 11 shows the average 
estimates provided by participants, as well as the 
true relative costs. Across all expense ratios, people 
provided similar responses. Without context, 
they estimated that all four example fees were 
roughly in the 40th percentile of cost. We found no 
differences in response patterns by peoples’ mutual 
fund ownership and knowledge of mutual fund 
fees. These findings suggest that investors are not 

aware of relative costs in the mutual fund industry 
and that a visual aid containing this information 
may be helpful for investors.

The average errors (the difference between aqua 
bars and red lines) that we see in Figure 11 suggest 
that investors are most confused about relative 
costs for the cheapest and most expensive funds. 
Both errors are concerning. Investors who hold 
relatively inexpensive funds, but are unaware of 
those low costs, may be motivated to search for 
an alternative, but this could be a time-consuming 
activity with little financial benefit. On the other 

FIGURE 10. Approximate Value of a $10,000 
Investment Over Time Assuming a 10% 
Annual Return

30

26

22

18

14

10

Years

D
o

lla
rs

 (
Th

o
us

an
d

s)

This figure shows how the value of a $10,000 
investment changes over time, assuming a constant 
10% annual return. The “high fee” line portrays an 
investment in a fund with an expense ratio of 1.05%. 
The “low fee” line portrays an investment in a fund 
with an expense ratio of 0.14%.

1 62 73 84 5 109

High fee Low fee

$24,444

$22,484

90

80

70

60

50

40

30

20

10

0

P
er

ce
nt

 o
f 

fu
nd

s

FIGURE 11. Estimated and Actual Percent of 
Funds that are Less Expensive

Expense ratio (fee)

This figure shows estimated and actual percent of 
funds that are less than a given fee. For instance, 
participants receiving a fund with an expense ratio 
of 0.08% thought that 42% of funds were cheaper, 
on average. However, only 19% of funds were 
cheaper. The difference between the height of the 
aqua bars and the red lines therefore shows the 
mismatch between estimated and actual relative 
costs. Participants, on average, underestimate the 
relative cost of funds with expense ratios of 0.32% 
or higher.

0.08% 0.32% 0.48% 0.49%

Estimated percent of funds that are less 
expensive

Actual percent of funds that are less expensive

42% 42%
38%

42%

90

80

70

60

50

40

30

20

10

0

P
er

ce
nt

 o
f 

fu
nd

s



24  |   O F F I C E  O F  T H E  I N V E S T O R  A D V O C AT E

hand, if investors have an expensive fund but do 
not realize it, they are unlikely to shop around even 
if shopping would financially benefit them greatly.

The finding that many investors are unaware of 
fund fee dispersion can explain why some investors 
hold high-cost index funds. 

Lesson 2. Fee Meters Help People 
Understand Relative Costs
Given peoples’ lack knowledge of the dispersion 
of fees charged by mutual funds, we next designed 
an experiment to see if a simple visual aid could 
increase awareness of which funds were more or 
less expensive. Over 4,000 people were provided 
with information about a hypothetical S&P 500 
mutual fund including: the objective of the fund, 
fees, risk factors, and performance

People were randomly assigned to one of four 
different presentations of fee information: no meter 
(text only), a continuous meter, a discrete meter 
that adds category boundaries to the continuous 
meter, or a labeled meter that adds information 
about the fees at each category boundary 
(an example of the labeled meter is shown in 
Figure 12). We tested these different versions of the 
meter, as finding the optimal visual display requires 
testing such design elements. 

Participants were also randomly assigned to one of 
five fee levels: 0.14%, 0.37%, 0.50%, 0.51%, and 
1.05%, which covered much of the distribution 
of actual costs for S&P 500 index funds as of the 
time of the testing. In all meter conditions, the 
fee assigned to the participant was shown at the 
appropriate location along the meter. 

On average, people that saw any fee meter were 
more accurate about the relative cost of their 
assigned fee than those that did not see a fee meter. 
Figure 13 shows us that people viewing a fee 
meter were better able to assess the relative cost 
of the fund that they viewed—the gaps between 
the estimate (solid yellow, gray and blue lines) and 
true costs (dashed red line) were about half the size 
among those seeing a meter, versus those seeing 
fee information only as text (solid green line). For 
instance, people viewing only text information 
about fees estimated that a fund with a 1.05% 
expense ratio was more expensive than 45% of 
funds. With a fee meter, investors believed that fund 
was more expensive than 60% of funds, which is 
closer to the true value of 98%. While the meters 
increased the accuracy of these estimates, the exact 
characteristics of the meter (continuous, discrete, 
labeled) did not have a significant effect on cost 
percentile estimates.

Better informed investors will be able to make 
better decisions about their investments. Fee meters, 
which increase knowledge about relative costs, 
have the potential to help people make investment 
decisions that are right for them.

Lesson 3. More is Needed to Help People 
Translate Knowledge about Relative 
Costs into Behavior
In the case of index funds, those who believe 
that their fund is relatively expensive should be 
more interested in searching for a cheaper fund, 
whereas those who believe their fund is relatively 
inexpensive should be less interested in searching 

FIGURE 12. Example of a Fee Meter

This figure shows an example of a labeled fee meter 
for a hypothetical S&P 500 index fund with a 0.37% 
expense ratio.

Middlewood Fund 
Fees: 0.37%

0.14% 0.24% 0.36% 0.51%

Low High



R E P O R T  O N  A C T I V I T I E S :  F I S C A L  Y E A R  2 0 2 4   |   25

for a cheaper fund (as finding a cheaper fund is 
less likely). To measure these potential patterns, 
we asked participants for their interest in seeing 
an alternative to the fund they had been randomly 
assigned.

Overall, we found that there was a positive 
correlation between relative cost estimates and 
interest in seeing an alternative fund; in other 
words, people who thought their randomly 
assigned fund was expensive were more interested 
in looking at another option. The meters increased 
knowledge of relative costs, however, their impact 
on interest in an alternative fund was modest, 
suggesting frictions between knowledge of relative 
costs and behaviors that reduce fees paid.

OIR conducted additional analyses to delve into 
this relationship between relative cost estimates 
and interest in seeing another fund. Several factors 

may have contributed to the weakness of this 
relationship, including a lack of knowledge about 
the cumulative effect of fees over time and beliefs 
that paying higher fees could lead to higher returns. 

We asked two additional survey questions to 
explore whether people perceive the importance 
of fees. First, we asked participants whether they 
agree or disagree with the statement “Mutual fund 
fees have little impact on a fund’s performance in 
the long run.” Only 26% of participants disagreed 
or strongly disagreed (5% strongly disagreed), 
suggesting that they would not be motivated to 
reduce fees.

We also asked participants to report their beliefs 
about the relationship between fees and net returns, 
depicted in Figure 14. Overall, 20% believe that 
higher fees lead to higher returns, about a third 
(36%) reported that there was no relationship, 

FIGURE 13. Estimated and Actual Percent of Funds that are Less Expensive for Participants Seeing 
Fee Information as Text or on a Meter

100

80

60

40

20

0

Expense ratio (fee)

P
er

ce
nt

 o
f F

un
d

s

0.14 0.5 0.510.37 1.05

Text Labeled MeterMeter Actual ValueDiscrete Meter

This figure shows estimated and actual percent of funds that are less than a given fee. The lines represent the 
different experimental conditions. Each participant was in one of the following conditions: the fee in text (“Text”), 
a fee meter without cutoffs or labels (“Meter”), a fee meter with discrete cutoffs (“Discrete Meter”), or a meter 
with labels (“Labeled Meter”). For reference, the figure also provides the actual percent of funds that are less 
than a given fee (“Actual Value”).



26  |   O F F I C E  O F  T H E  I N V E S T O R  A D V O C AT E

and only 12% believed that lower expenses would 
yield higher net returns. While this may be a noisy 
indicator of how investors viewed the funds offered 
in the experiment, it suggests some investors may 
have been willing to pay higher fees with the hope 
of achieving higher returns.

We believe that, together, these two survey 
questions suggest one barrier to translating 
between knowledge of fees and search behavior: 
people do not see fees as very important in 
determining investment outcomes. If individuals do 
not believe that mutual fund fees affect long-run 
performance, or believe that higher fee funds will 
yield higher returns, it is unlikely that they will seek 
lower-cost funds.

Summary of Findings and Discussion
This testing project demonstrates that, in the 
absence of additional information, consumers do 
not know the distribution of costs in the mutual 
fund market (Lesson 1). They tend to estimate 
that a variety of expense ratios are about the 
same in terms of relative costs. As these estimates 
hover around the 40th percentile regardless of the 
underlying fee, investors overestimate the cost of 

relatively inexpensive funds and underestimate the 
costs of relatively expensive funds. Providing them 
with comparative fee information in the form of a 
meter substantially improves their understanding 
of relative costs (Lesson 2). In turn, this improved 
knowledge increases interest in searching for an 
alternative fund. However, the increases in search 
were small, raising questions about the barriers that 
may exist to translating knowledge of relative costs 
into subsequent behavior (Lesson 3).

Overall, this project provides a data-driven 
approach to understanding potential investors’ 
reactions to mutual fund fees and fee information. 
Academic research raises longstanding questions 
about why fee dispersion continues to exist in the 
mutual fund market, especially for mutual funds 
like S&P 500 index funds, which are arguably 
interchangeable except for fees. At the same time, 
the policy community has a longstanding interest 
in ensuring that investors do not pay too much for 
mutual funds. Our results provide an important 
demonstration that price dispersion persists because 
of lack of knowledge of fees, and that fee meters 
may help investors understand cost information in 
their investment decisions. 

FIGURE 14. Perceived Relationship Between Mutual Fund Fees and Net Performance

0% 25%20% 35%30%15%5% 10% 40%

20%Funds with higher expenses (i.e., fees) tend 
to have higher net returns (after expenses)

12%Funds with lower expenses (i.e., fees) tend to 
have higher net returns (after expenses)

36%There is no relationship between expenses 
(i.e., fees) and returns

32%I don’t know

“Which of the following best describes your view on the relationship 
between a mutual fund’s expenses and performance?”



R E P O R T  O N  A C T I V I T I E S :  F I S C A L  Y E A R  2 0 2 4   |   27

This research also helps illustrate the value that 
OIR can contribute to the SEC and broader 
research and policy communities, leveraging 
the group’s expertise in crafting and conducting 
custom, targeted research projects on important 
investor issues. The research represents another 
step in OIR’s journey to contribute to more 
effective disclosure policy, an important component 
of the SEC’s broader investor protection mission. 
In past annual reports, we have discussed mutual 
fund fee meters, fee jargon, performance displays 
and benchmarks, and performed holistic testing 
on disclosures for a particularly complex product. 
Each project has been designed to provide 
targeted insights on the product or display under 
consideration. Together, they have promise for 
moving the needle on investors’ overall experience 
with financial products.

This body of work also shows that much more 
can be done. In the future, we hope to continue 
to pursue research that reimagines investors’ 
experiences, concentrating on what have become 
recurring themes in our disclosure testing—among 
these: that simply disclosing information does not 
provide meaning or context, that there may be 
limits to baseline financial knowledge or education 
that constrain the value of disclosures, and that 
behavioral frictions to taking action mean that 
investors can be informed without increasing their 
well-being. We look forward to continued work 
with SEC and academic communities on these 
important issues.

RESEARCH EXAMINING 
TIME HORIZONS 
A critical component of investment decisions is 
their “time horizon,” defined as “the number 
of months, years, or decades [needed] to invest 
to achieve [a] financial goal.”55 When giving 
advice, registered investment advisers are required 
to “make a reasonable inquiry into the client’s 

financial situation, level of financial sophistication, 
investment experience, and financial goals,” and 
use an “investment profile,” typically consisting 
of a series of multiple choice questions, to do 
so.56 According to regulatory interpretation by 
the SEC, time horizons are important to include 
in the investment profile when recommending 
an investment strategy. Similarly, broker-dealers 
are legally required to determine whether 
securities transactions or investment strategies are 
appropriate for investors, based on investor profiles 
that include time horizon.57

Given the importance of time horizons in 
investment advice and decision-making, the 
design and consistency of time horizon questions 
should be of interest to practitioners interested 
in investors’ well-being. In FY 2024, OIR 
conducted research to explore how reported 
time horizons vary depending on the “response 
options” provided to survey respondents.58 
Specifically, we varied whether respondents saw 
mostly “short-run” options, which listed many 
potential answers focusing on the near term (e.g., 
“Less than a week,” “The next week,” “The next 

Financial goals can 
happen at different 
times in the future.



28  |   O F F I C E  O F  T H E  I N V E S T O R  A D V O C AT E

month”), or mostly “long-run” options, which 
listed many potential answers focusing on more 
distant periods (e.g., “The next 10–15 years,” 
“The next 15–20 years,” “More than 20 years”). 
Additionally, two other groups of respondents 
saw mostly “mid-run” options, with intermediate 
time periods, or an “open-ended” format, which 
allowed them to write any time period in a 
fill-in-the-blank format. Importantly, however, in 
all conditions, we designed the response options 
so that each set had a clear cutoff at one year, 
allowing us to classify all responses into longer or 
shorter than one year. 

Lesson 1. Whether Response Options are 
Short-Run, Mid-Run, Long-Run, or 
Open-Ended Impacts Reported 
Time Horizons
Using a nationally-representative sample of people, 
we asked the following question to measure time 
horizons, “In deciding how much of their income 
to spend or save, people are likely to think about 
different financial planning periods. In planning 
your saving and spending, [which of the following 
time periods/what time period] is most important 
to you?” This question is used on many nationally 
representative surveys to measure financial time 
horizons and has been analyzed to understand use 
of investment products, even though the question 
is not restricted to investment decisions .59

We find that people’s reported time horizons are 
shortest when they see short-run options, longest 
when they see long-run options, with mid-run and 
open-ended responses falling in between. When 
people see the set of short-run response options, 
they give time horizons greater than one year 18% 
of the time. When people see long-run response 
options, they report time horizons greater than 
one year 74% of the time (see Figure 15). Given 
that broker recommendations and investment 
advice from advisors are partially determined by 
time horizon questions, this research implies that 

the choice of response options may dramatically 
change investment allocations coming from 
brokers and advisors. 

Lesson 2. Mid-Run Responses are Closest 
to Open-Ended Responses, Likely Making 
Them the Most Accurate
Past research generally finds that open-ended 
questions allow people to answer questions in 
the most natural way,60 thus resulting in the most 
accurate estimates. Therefore, we included an 
open-ended condition which allowed participants 
to express time horizons in the way that was 
most natural to them. When we compare time 
horizons from this open-ended condition to time 
horizons provided in the short-, mid-, and long-run 
conditions, we find that those from the mid-run 
condition are closest to the open-ended time 
horizons (see Figure 15). This alignment suggests 

FIGURE 15. Proportion of Respondents 
Reporting a Time Horizon of Greater than  
One Year, by Condition	

This figure shows the proportion of respondents 
providing a time horizon of greater than one year, 
depending on the response options provided to the 
time horizon question.

75%

50%

25%

0

Condition

Closed Options
Open 

Option

Ti
m

e 
H

o
ri

zo
n 

G
re

at
er

 T
ha

n 
1 Y

ea
r

Short-run Mid-run Long-run Open- 
ended

18.0%

31.1%

74.0%

37.6%



R E P O R T  O N  A C T I V I T I E S :  F I S C A L  Y E A R  2 0 2 4   |   29

that, of the sets of response options we tested, 
the mid-run options result in the most accurate 
estimates of people’s time horizons.

An alternative to the mid-run response options 
would be to administer the open-ended version of 
the question. As found in past research, however, 
people are more likely to skip open-ended 
questions, which may signal that this question 
is more burdensome to answer. Specifically, 
skip rates are roughly 3.4% for the open-ended 
question, versus at most 0.1% among the close-
ended questions, which limits the total coverage in 
our data.

Discussion and Conclusion
To our knowledge, past research has not explored 
the time horizons used in investor profiles. On 
publicly posted investor profiles, we see that short 
time horizon options include “Immediately” to 
“0–5 years”, while long response options vary 
from “10+ years” to “more than 20 years.” The 
responses we examined in our research varied 
less dramatically than these profiles, yet we find a 
56-percentage point difference in the proportion 
of respondents providing time horizons greater 
than one year. We therefore suspect that people’s 
responses may be substantially impacted by the 

investor profile question they encounter. Having 
a substantially different time horizon should 
dramatically change an investor’s optimal asset 
allocation, according to economic models of 
optimal investing behavior.61 Such different asset 
allocations could substantially impact portfolio 
returns and risk. Yet, we do not see a strong 
financial justification for why variation in time 
horizon response options should impact the asset 
allocation recommendation investors receive.

We examined the effects of response options on 
time horizons using a commonly-administered 
question that pertains to a range of financial 
decisions, including saving and spending. While 
the results of this research should be replicated in 
an investment context, these results suggest that 
brokers and advisors could consider using the 
set of mid-run response options, as they result 
in reported time horizons that are most similar 
to open-ended responses. When there is some 
personal interaction between clients and brokers 
or advisors, asset allocation differences coming 
purely from question differences may be reduced 
through additional discussion of financial goals 
and their timelines. 



“It is all too clear that we have entered a new 

era, where protecting individuals from financial 

predators will require superior tactics and 

greater resources.”



R E P O R T  O N  A C T I V I T I E S :  F I S C A L  Y E A R  2 0 2 4   |   31

MESSAGE FROM 
THE OMBUDS

T his Report on Activities warns of a 
looming complex investment fraud 
crisis that could threaten the stability 
of our markets, our banking systems, 

and our lives. Professional fraudsters prey on 
victims in a digital world with no borders, through 
anonymous crypto transactions, and with endless 
opportunity to exploit our dependence on social 
media and technology. Anyone can fall victim to 
complex investment fraud—irrespective of party, 
demographics, location, or socioeconomic status. 

The exceptional scope and staggering financial 
impact of the current fraud crisis has been the 
subject of many alarming law enforcement reports 
and alerts. It is all too clear that we have entered 
a new era, where protecting individuals from 
financial predators will require superior tactics and 
greater resources. We urge Congress to provide 
the SEC, other financial regulators, and law 
enforcement agencies with the funds necessary to 
combat this criminal activity. Anything less than 
a fully resourced, coordinated strategy across law 
enforcement and regulatory leadership may fail to 
quell this rising tide of fraud. 

We also urge Congress to help restore investor trust 
in the agencies established to protect them. In the 
Ombuds Office, we hear the frustrated voices of 
investor distrust every day. There is a fundamental 
disconnect between investor perception of the SEC 
and what the SEC does, every day, on their behalf. 
This disconnect could prevent us from reaching the 
investors who most need our help.

It has been my honor to serve as the SEC Ombuds 
for over two years. In this role, I am proud to have 
led a team that assisted thousands of investors, 
conducted extensive research and reported 
groundbreaking findings on mandatory arbitration, 
and to have seized every opportunity to introduce 
the voices of retail investors throughout the 
Commission. Now, as I step down from my role 
this December, I would like to take the opportunity 
to introduce the staff 
of the SEC to members 
of Congress and to the 
investors that we serve. 

For almost ten years, I 
have called the SEC my 
professional home. The 
colleagues and friends I 
have met are among the 
most knowledgeable, 
goal-oriented, conscien-
tious professionals I’ve 
encountered in my 20-year legal career. The work 
of the agency is intensely complex and continually 
evolving, as our markets evolve to increasing levels 
of complexity. But agency staff are zealous in the 
execution of its innumerable tasks, guided at every 
step by the highest levels of ethical standards. 
SEC staff tirelessly educate themselves on new 
and developing areas of law and emerging market 
events, products, and trends. They are, at all times, 
cognizant of and dedicated to fulfilling the agency’s 
mission: to protect investors; maintain fair, orderly, 
and efficiency markets; and to facilitate capital 



32  |   O F F I C E  O F  T H E  I N V E S T O R  A D V O C AT E

formation. Fulling these obligations sometimes 
requires working late nights, weekends, and long 
hours—with no expectation of remuneration, 
recognition, or reward—because the work must be 
done to serve the public interest. 

I would like to thank my SEC colleagues for their 
collaboration, their shared knowledge, and their 
assistance in fortifying the work of the Ombuds 
Office for the past two years. And I would like to 
express my profound appreciation to the Ombuds 
team, without whom the work of this Office 
would not have been possible. Your dedication 
is unparalleled, your integrity and courage 
unmatched. With your support, this tiny office 
has achieved outsized results for the protection of 
investors everywhere. 

As I write this, I recognize I am leaving the best 
and most impactful role I might ever have. So, I 
save my final thank you to the Investor Advocate, 
Cristina Martin Firvida, for entrusting me to serve 
in this capacity. I will take the knowledge and the 
empathy gained from this experience and carry it 
forward throughout my career. 

With gratitude to the agency that has forged me 
into a better lawyer and a better person, and with 
the hope that Congress will support the SEC in 
quashing the rising tide of fraud—I humbly submit 
this Ombuds Report on Activities for the Fiscal 
Year 2024. 

Respectfully Submitted,

STACY A. PUENTE 
Ombuds



R E P O R T  O N  A C T I V I T I E S :  F I S C A L  Y E A R  2 0 2 4   |   33

WHO WE ARE 
The Securities Exchange Act requires the Investor 
Advocate to appoint an Ombudsman (Ombuds) 
to act as a liaison for retail investors to relay their 
concerns and questions about the Commission 
and the self-regulatory organizations (SROs) the 
Commission oversees.62 The Ombuds staff consists 
of an experienced team of lawyers, law clerks, 
and paralegals, each with differing subject matter 
expertise, all dedicated to providing personalized, 
tailored assistance to the retail investors that 
contact the Ombuds Office for help. Through 
direct engagement with investors, relevant parties 
within the Commission, and external stakeholders 
committed to investor protection issues, the 
Ombuds Office fulfills its statutory duty to help 
retail investors resolve issues relating to the 
Commission and SROs.

Among other statutory duties, the Ombuds must 
submit biannual reports to Congress describing the 
work of the office and its effectiveness in assisting 
retail investors.63 This Ombuds’ Report provides a 
look back on the Ombuds’ activities for the period 
October 1, 2023 through September 30, 2024, and 
discusses the Ombuds’ objectives and outlook for 
Fiscal Year 2025.

WHAT WE DO 
As noted above, the Ombuds is required by 
statute to: 

1.	 help retail investors resolve questions 
and complaints they may have with the 

Commission or with SROs the Commission 
oversees; 

2.	 review and make recommendations regarding 
policies and procedures that encourage 
investors to present questions to the Investor 
Advocate regarding compliance with the 
securities laws; 

3.	 take steps to ensure the confidentiality of 
investor communications with our Office; and 

4.	 submit biannual reports to the Investor 
Advocate that describe the activities and 
evaluate the effectiveness of the Office.64 

HOW WE HELP 
Our primary responsibility is to assist retail 
investors by resolving concerns, questions, and 
complaints about the SEC and the SROs subject 
to SEC oversight. We accomplish this in several 
ways—most commonly by providing information, 
making referrals, and collaborating with other 
divisions, offices, and SROs about complaints that 
impact investor interests. 

Figure 16 illustrates the process by which we 
receive and assist investors with their requests:

Additionally, we submit credible allegations 
of securities violations to the Divisions of 
Examinations and Enforcement for potential 
examination, investigation, or action. We study 
and report on issues of significant investor 
impact, assessing the effects of policies or 
practices on retail investors. Last, we inform the 
Investor Advocate and other interested parties 
within the Commission about trending investor 
protection concerns. 



34  |   O F F I C E  O F  T H E  I N V E S T O R  A D V O C AT E

HOW TO CONTACT US 
Our primary means of communication with 
the public is through the Ombudsman Matter 
Management System (OMMS), an online portal 
for receiving, responding to, and managing data 
submitted to our Office. The public can also 
contact us by email, telephone, and regular mail. 

INVESTOR VOICES, BY THE NUMBERS 
The Ombuds team maintains 
records in OMMS of all submissions 
and responses handled by our 
Office. Matters are assigned a label 

or “Primary Issue Category,” reflecting the nature 
of the issues raised in the submission.65 

In tracking investor submissions by volume and by 
Primary Issue Category, OMMS may serve as an 
early warning system, flagging existing or potential 
risks for retail investors.

During the Reporting Period (October 1, 2023 – 
September 30, 2024), the Ombuds Office received 
and processed 2,772 matters submitted by U.S. 
and foreign investors, market participants, and 
other interested members of the public. Figure 17 
illustrates the number of matters divided into 12 
Primary Issue Categories, which are used to classify 
the nature of the submission.

In addition, the Ombuds team made approximately 
3,390 follow-up emails, phone calls, and other 
forms of correspondence to resolve the 2,772 
matters received—for a combined total of 6,162 
contacts with or on behalf of submitters from 
October 1, 2023, to September 30, 2024. Figure 18 
details the number of follow-up contacts with the 
public, separated by Primary Issue Category. 

The volume of matters submitted to the Ombuds 
Office and the team’s efforts to resolve these matters 
continue to grow over time. The total number of 
matters received in FY24 (2,772) increased by six 
percent from FY23 (2,605). More notably, the total 

Review

The Ombuds team reviews all incoming investor 
correspondence to determine if and how we may assist.

FIGURE 16. The Process by Which We Receive and Assist Investors with Their Requests 

Research

The Ombuds team identifies the nature of the issue, conducts 
tailored research, and engages with appropriate personnel 

within the Commission or SROs to gather relevant information.

Resolve

The Ombuds team works to resolve investor 
questions and complaints by providing 

investors with requested information and 
access to additional resources, by escalating 

certain matters through appropriate channels, when 
necessary, and by monitoring outcomes.



FIGURE 17. Matters by Primary Issue Category, 
October 1, 2023 – September 30, 2024

Allegations of securities law violations (247)

Atypical matters (543)

Inquiries about corporate disclosure/ 
registration (57)

FINRA Complaints/Questions/Procedures (74)

Investor Account matters: (840)

Investment products- questions/complaints (82)

Non-SEC/Other matters (351)

SEC Investigations/Litigation/Enforcement  
Actions (111)

SEC/Other Impersonators (91)

Other SEC Questions/Complaints (340)

Other SRO Complaints (29)

Potential Organized Campaign (7)

Total 2,772  

30%

4%

3%

9%

20%

3%

13%
2%

3%

12%

1% 0.25%

R E P O R T  O N  A C T I V I T I E S :  F I S C A L  Y E A R  2 0 2 4   |   35

number of contacts in FY24 (3,390) marked a 20 
percent increase from the number of contacts in 
FY23 (2,829). The growth in both metrics suggests 
two potential conclusions: (1) the public is more 
aware of the SEC Ombuds function, and more 
frequently contacts the Ombuds Office to resolve 
their questions, complaints and concerns; and (2) the 
matters received by the Ombuds team are increasing 
in complexity as well as number, requiring the 
Ombuds team to resolve these matters through a 
greater number of contacts on the public’s behalf. 

We note, for example, that Fiscal Year 2024 saw the 
creation of a new primary issue category for “SEC/
Other Impersonators.” This category was created in 
response to an influx of matters where the SEC’s or 
other regulator’s seal, and/or the name or signature 
of a real or purported SEC or other regulator 
employee were fabricated as part of a fraudulent 
scheme. Given the sensitivity surrounding these 
matters, they involve specific processing and 

FIGURE 18. Contacts by Primary Issue 
Category, October 1, 2023 – September 30, 
2024

Allegations of securities law violations (408)66

Atypical matters (61)

Inquiries about corporate disclosure/ 
registration (85)

FINRA Complaints/Questions/Procedures (130)

Investor Account Matters: (1,136)

Investment Products-Questions/Complaints (110)

Non-SEC/Other Matters (431)

SEC Investigations/Litigation/ 
Enforcement Actions (175)

SEC/Other Impersonators (195)

Other SEC Questions/Complaints (606)

Other SRO Complaints/Questions/Procedures (30)

Potential Organized Campaign (11)

Securities Laws/Rules/Regulations (1)67

SEC Questions/Complaints (12)

Total 3,390  

34%

5%

6%

12%

4%

3%

13%

18%
3%

0.35%
0.03%0.32%

1%

2%



36  |   O F F I C E  O F  T H E  I N V E S T O R  A D V O C AT E

require a greater degree of correspondence with the 
submitter and other offices within the Commission. 
In FY24, our Office handled 91 matters involving 
the fraudulent impersonation of an SEC or other 
regulatory employee, including one impersonation 
of the SEC Ombuds. 

The Ombuds Office continues to receive an 
increasing volume of complaints alleging fraud and 
other securities law violations. Such submissions 
increased by 28 percent from 2022 to 2023, and 
by 41 percent from 2023 to 2024,68  with most 
of the complaints involving crypto investments 
in some manner. Unfortunately, these matters are 
generally reported to our Office after the fraud has 
occurred, when it is too late to prevent them. We 
do our best to assist these investors, but there is 
often no recourse. We can only listen to their stories 
and offer information to prevent them from being 
victimized again in the future. 

In the following section of our Report, we share 
our understanding of the factors driving the 
expansion of these crimes, along with a snapshot 
of the fraud experience on a personal level. This 
section is based on reputable external sources as 
well as our own interactions with the investors we 
assist every day.

THE ONGOING FIGHT AGAINST FRAUD
Federal regulators—including the 
SEC—have witnessed a major 
proliferation in reported investment 
fraud schemes over the past 
several years.69 Most of the fraud-

related complaints the Ombuds Office receives 
involve fraudulent crypto investments initiated 
through social media contacts that later develop 
into relationship confidence scams. The types 
and sophistication of scams and scammers have 
evolved over time, revealing a nascent, global fraud 

industry with vast potential to invade and disrupt 
international securities markets.

Same game, new playbook, no rules 
It is well-known among law enforcement and 
regulators that criminals are quick to adopt new 
strategies and technologies. The launch of crypto 
and crypto investments has unfortunately resulted 
in the somewhat predictable emergence of crypto 
investment scams. The SEC’s Office of Investor 
Education and Advocacy has emphasized the 
inherent risks in crypto-related investments, which 
can be anonymous and difficult to trace (often 
across international borders), making it unlikely 
that the SEC or other regulators can recover lost 
investments.70 This makes crypto an ideal vehicle 
for criminal activity. Perhaps the most unsettling 
aspects of these crimes are the professionalized 
manipulation of victims and the industrial scope of 
the criminal operations.

Fraud has become an industry, in part, due to 
organized crime syndicates’ investment in “fraud 
factories,” high-security compounds located in 
countries where the rule of law is weak, and the 
ill-gotten gains give rise to a lucrative “shadow 
economy” that thrives outside the scrutiny of 
regulation.71 Research has shown that many 
individuals acting as scammers are doing so 
unwillingly, and are, themselves, victims of the 
fraud industry.72 Criminal syndicates target 
desperate, unsuspecting job seekers with fake job 
ads, inducing them to accept employment abroad. 
Upon arrival in the foreign country, their passports 
are confiscated, they are forced to participate in 
the fraud schemes, and they are not permitted to 
leave.73 They must follow scripts and processes 
that have been refined over time to psychologically 
manipulate targets into relinquishing their 
money. If the scammers fail to defraud their 
targets, they are subjected to coercive and abusive 
punishments.74 The horrors experienced by theR E P O R T  O N  A C T I V I T I E S :  F I S C A L  Y E A R  2 0 2 4   |   37

human trafficking victims are well-documented, 
beyond comprehension, and beyond the scope of 
this report. However, international human rights 
groups are actively pursuing means to stop the flow 
of this exploited labor, which could ultimately curb 
the expansion of the fraud industry.75

The script 
Investors that contact our Office for assistance 
regularly report that the fraud began with a 
single contact on social media or text: a question, 
a photograph, an invitation to connect. If the 
investor replies, fraudsters use various forms of 
psychological manipulation and intense, frequent 
communication to cultivate an intimate relationship 
with their intended victim. In this early stage, 
fraudsters might “love bomb” their targets, 
showering them with praise and affection to 
quickly establish trust and attachment. 

Scammers generally portray themselves as 
financially successful—success that they attribute 
to profitable cryptocurrency trades. The scammer 
may describe the cryptocurrency investments as 
one facet of their life and focus on other details of 
his life to appear trustworthy—such as concerns 
about family relationships, or hobbies. By casually 
referencing the crypto investment without soliciting 
the victim’s participation, the victim generally 
accepts the scammer’s claim about the investment’s 
profitability without feeling the need to confirm the 
truthfulness of the claim. 

The investor also shares information about their life 
with the scammer—their current financial situation 
and goals, information about family and friends, 
and the values that motivate them. As the scammer 
draws the victim into their confidence, they begin 
to use the investor’s personal information against 
them, often convincing them to reject loved 
ones who might question the legitimacy of their 
relationship or the eventual crypto investment. 

Closing the deal
Once the scammer believes they have successfully 
earned the victim’s trust, they will use other 
manipulative tactics, such as guilt, fear of missing 
out, or threatening to exit the relationship to 
coerce them to invest in the same “profitable” 
crypto investment through the same “investment 
group,” typically beginning with a low dollar 
amount paid into a crypto wallet. The scammer 
will show the investor lucrative but fake returns 
and convince them to invest more money in the 
scheme. Some investors report they would have 
never considered cryptocurrency investments, 
but for their trust in the relationship and the 
“evidence” of large returns. 

Eventually, the investor enters the final phase of 
the scheme when they unsuccessfully attempt to 
withdraw their earnings. The “investment group” 
requires that they pay “taxes” or “commissions” 
before their funds can be released. The scammer 
portrays the demands as routine and might use 
the investor’s personal information to suggest 
other resources with which to pay the fees: loans 
from family members, liquidating retirement 
accounts. Our team has spoken to investors at 
this stage who are nervous about the investments, 
and we have confirmed that the investments were 
fraudulent. Nevertheless, some investors were so 
swayed by the scammer that they still paid the 
“taxes” or “commissions.” 

The crypto investment firm delays release of 
the funds by continuing to demand additional 
payments. Eventually, the investor realizes they 
cannot recover any “returns” or even their initial 
investment amount. Communications with 
the scammer terminate along with the valued 
relationship.



38  |   O F F I C E  O F  T H E  I N V E S T O R  A D V O C AT E

Revictimization: recovery fraud 
Unfortunately, there is often another layer to 
the scheme: recovery fraud. “Recovery firms,” 
purporting to be experts in cryptocurrency 
tracking, promise they will recover some or all a 
defrauded investor’s lost funds. They might contact 
victims on various social media or messaging plat-
forms or advertise their fraudulent recovery services 
in online news articles. The victims, desperate to 
recoup their losses after the scam, will pay the 
recovery firm to get their money back, not real-
izing the “recovery firm” might be involved in the 
initial fraud scheme. If anything, the firm might 
produce an inaccurate tracking report or submit a 
boilerplate letter to a regulator. Sadly, the investors 
hoping to recover their initial losses are defrauded 
yet again.

Our Office has received numerous boilerplate 
submissions from so-called recovery firms, and we 
have discussed these submissions with the Division 
of Enforcement. Through our team’s research, we 
discovered that a number of these submissions 
were drafted by the same recovery firm, purporting 
to be a consumer advocacy group assisting 
defrauded investors. 

The aftermath
Our Office has counseled individuals who have lost 
everything and are in debt after a lifetime of saving. 
In the end, scammers abscond with more than 
investors’ hard-earned money; they rob investors 
of their sense of security and well-being. Victims 
report feelings of profound loss at the betrayal 
and disappearance of their friend or lover. They 
regularly discuss their feelings of embarrassment 
for being deceived, and their regret for not heeding 
the warnings of family and friends. They have 
expressed fear of punishment from loved ones for 
engaging in a relationship that might be viewed as 
a betrayal. 

Media portrayals of fraud victims as naïve reinforce 
those negative feelings and discourage them from 
reporting the crime. Such portrayals also make it 
less likely for the general population to recognize 
that anyone could be the victim of an investment 
fraud scheme. Indeed, many of the victims assisted 
by our Office hold advanced degrees or own their 
own successful businesses, believing that their 
sophistication would have protected them from 
being defrauded. Educated, affluent individuals 
are often targeted in these schemes because of their 
financial success. They often report being aware of 
investor education efforts and news reports about 
investment fraud schemes. Yet investor education 
can only go so far. Scammers embed themselves 
so deeply in targets’ lives that targets are unable to 
imagine the betrayal. 

Outlook
The growing profitability of the fraud trade and 
the availability of exploited labor will predictably 
lead to an increasing number of victims absent 
aggressive, consolidated intervention from 
regulators and law enforcement. As discussed 
throughout this Report, such intervention is 
necessary on a global scale to stop the financial 
and emotional losses associated with fraud, and 
to stop the human suffering associated with the 
fraud enterprise. 

ENGAGING WITH THE PUBLIC
Investor Advocacy Clinic Summit 2024
On Friday, March 1, 2024, the Ombuds Office 
hosted the fifth annual Investor Advocacy 
Clinic Summit at the SEC Headquarters. The 
event, held in person for the first time since 
2019, was attended by over 170 guests and 
was livestreamed on the SEC’s website to 
nearly 1,000 viewers. Joined by the Office 
of Investor Education and Advocacy and the 



R E P O R T  O N  A C T I V I T I E S :  F I S C A L  Y E A R  2 0 2 4   |   39

INVESTOR ADVOCACY CLINIC SUMMIT 2024. Engagement

Office of Minority and Women Inclusion, the 
event highlighted the work of the law school 
clinics and emphasized the need for additional 
law school clinics in underserved parts of the 
U.S. Due to funding and other constraints, the 
number of law school clinics has dwindled from 
a peak of 25 to 10. There are currently no clinics 
operating west of Chicago, and only one clinic 
exists south of Washington DC, leaving investors 
in most of the geographic U.S. without access to 
the unique and valuable pro bono services these 
clinics can provide. 

Prior to the official Summit, clinic directors held 
a roundtable to discuss the benefits of securities 
industry clinic experience for their students, 
their law schools, and their communities. During 
the Summit, all 10 active law school investor 
advocacy clinics engaged with SEC subject 
matter experts on the issues facing retail investors 
and their experiences in securities industry 
arbitrations. Participating law schools included (in 
alphabetical order): Benjamin N. Cardozo School 
of Law, Cornell Law School, Fordham University 
School of Law, Howard University School of 
Law, Northwestern Pritzker School of Law, Pace 
University School of Law, Seton Hall University 
School of Law, St. John’s University School of 

Law, University of Miami School of Law, and the 
University of Pittsburgh School of Law. 

The event featured remarks from SEC Chair Gary 
Gensler, Commissioners Hester Peirce and Jaime 
Lizárraga, as well as remarks from Richard Berry, 
the Director of Financial Industry Regulatory 
Authority (FINRA) Dispute Resolution Services, 
Cristina Martin Firvida, the SEC’s Investor 
Advocate, Richard Best, former Director of the 
SEC’s Division of Examinations, Eric Gerding, 
Director of the SEC’s Division of Corporation 
Finance, Gurbir Grewal, Director of the SEC’s 
Division of Enforcement, and William Birdthistle, 
former Director of the SEC’s Division of Investment 
Management (in order of appearance). Keynote 
remarks were delivered by Nicole Iannarone, 
then-Chair of FINRA’s National Arbitration and 
Mediation Committee and Professor of the Drexel 
University Kline School of Law. 

Additional Engagement Activities 
In addition to the Summit, Ombuds staff 
participated in numerous external and internal 
engagements throughout the fiscal year with the 
goal of improving our service to retail investors, 
and informing others about the services we 
provide. With the Investor Advocate, we met with 



40  |   O F F I C E  O F  T H E  I N V E S T O R  A D V O C AT E

a college investment club about the investment 
preferences of new investors. Pursuant to our 
ongoing focus on investor fraud, our team 
met with investor protection groups and other 
federal agencies to discuss ways to prevent fraud 
before it occurs. At the NASAA Senior Issues 
Commission Annual Meeting, we discussed with 
other regulators and industry members the biggest 
challenges facing senior investors today—including 
online scams and investment fraud. We furthered 
our commitment to the law school investment 
advocacy clinics by attending the Securities 

Arbitration Roundtable at Fordham Law School, 
where we listened to clinic directors’ concerns 
about their ability to meet the needs of their 
clients. In July, representatives of the Ombuds 
Office attended the Commodity Futures Trading 
Commission’s (CFTC’s) first Fraud Disruption 
Conference, focused on financial confidence scams 
and how to prevent them. Ombuds staff also 
continued its periodic meetings with the Coalition 
of Federal Ombuds and the Public Investors 
Advocate Bar Association (PIABA). 



R E P O R T  O N  A C T I V I T I E S :  F I S C A L  Y E A R  2 0 2 4   |   41

Endnotes
1	 Exchange Act § 4(g)(6), 15 U.S.C. § 78d(g)(6).
2	 Exchange Act § 4(g)(6)(A)(i), 15 U.S.C. § 78d(g)(6)

(A)(i).
3	 Exchange Act § 4(g)(6)(B)(i), 15 U.S.C. § 78d(g)(6)

(B)(i).
4	 Federal Trade Commission, Protecting Older 

Consumers, 2023-2024 (Oct. 18, 2024), https://
www.ftc.gov/system/files/ftc_gov/pdf/federal-trade-
commission-protecting-older-adults-report_102024.pdf.

5	 U.S. Department of the Treasury, 2024 National 
Money Laundering Risk Assessment (Feb. 2024), 
https://home.treasury.gov/system/files/136/2024-
National-Money-Laundering-Risk-Assessment.
pdf#page=10.

6	 See Exchange Act § 4(g)(4), 15 U.S.C. § 78d(g)(4) 
7	 See SEC performance goals included in the Fiscal 

Year 2025 Annual Performance Plan, Securities 
and Exchange Commission, Fiscal Year 2025 
Congressional Budget Justification Annual 
Performance Plan Fiscal Year 2023 Annual 
Performance Report (Mar. 11, 2024), https://www.sec.
gov/files/fy-2025-congressional-budget-justification.
pdf#page=118.

8	 See the definition included within the SEC 
performance goal #6, id. at 118.

9	 OIAD conducted investor engagement activities with 
over forty new entities in fiscal year 2024.

10	 SEC, Division of Examinations, 2025 Examination 
Priorities (Oct. 21, 2024), https://www.sec.gov/
files/2025-exam-priorities.pdf. 

11	 See SEC, Event Webcast, SEC-NASAA-Georgia 
Secretary of State Joint Investor Roundtable (Mar. 27, 
2024), https://www.sec.gov/newsroom/meetings-
events/sec-nasaa-georgia-secretary-state-joint-investor-
roundtable. 

12	 See Press Release, SEC, SEC Launches Interagency 
Securities Council to Coordinate Enforcement 
Efforts Across Federal, State, and Local Agencies 
(July 19, 2024), https://www.sec.gov/newsroom/press-
releases/2024-86. 

13	 Id.
14	 As of September 30, 2024.
15	 This list of problematic products identified by the SEC 

is based on staff analysis of the alerts and bulletins 
issued by the SEC’s Office of Investor Education and 
Advocacy and the SEC’s Division of Examinations 
during fiscal year 2024. See, SEC, Office of Investor 
Education and Advocacy, Investor Alerts and 
Bulletins, https://www.sec.gov/investor/alerts (last 
visited Nov. 8, 2024); see also SEC, Division of 
Examinations, Risk Alerts, https://www.sec.gov/exams 
(last visited Nov. 8, 2024).

16	 See NASAA, Top Investor Threats, https://www.nasaa.
org/investor-education/fraud-center/top-investor-
threats (last visited Nov. 8, 2024). 

17	 This list of red flags is based on educator fraud 
tools developed by the FINRA Foundation during 
fiscal year 2023. See FINRA Investor Education 
Foundation, Fraud Tools, https://www.conemifyoucan.
org/fraud-tools/index.html (last visited Nov. 8, 2024).

18	 PCAOB, Investor Advisory—Exercise Caution with 
Third-Party Verification/Proof of Reserve Reports 
(Mar. 8, 2023), https://pcaobus.org/resources/
information-for-investors/investor-advisories/
investor-advisory-exercise-caution-with-third-
party-verification-proof-of-reserve-reports; Erica Y. 
Williams, Chair, PCAOB, Statement on Rise in Audit 
Deficiency Rates (July 25, 2023), https://pcaobus.org/
news-events/speeches/speech-detail/chair-williams-
statement-on-rise-in-audit-deficiency-rates.

19	 The International Organization of Securities 
Commissions, Final Report with Policy 
Recommendations for Decentralized Finance (Dec. 
2023), https://www.iosco.org/library/pubdocs/pdf/
IOSCOPD754.pdf.

20	 Conflicts of Interest Associated with the use of 
Predictive Analytics by Broker-Dealers and Investment 
Advisers, Exchange Act Release No. 97990, Advisers 
Act Release No. 6353, 88 Fed. Reg. 53960 (proposed 
July 26, 2023), https://www.sec.gov/files/rules/
proposed/2023/34-97990.pdf.

21	 SEC, Office of Investor Education and Advocacy, 
Investor Complaints Data Archive (Nov. 6, 2024), 
https://www.sec.gov/data/investor-complaints-data-
archive.

22	 Id.
23	 SEC, Office of Investor Education and Advocacy, 

Five Ways Fraudsters may lure Victims into Scams 
Involving Crypto Asset Securities, Investor Alert (May 
29, 2024), https://www.investor.gov/introduction-
investing/general-resources/news-alerts/alerts-bulletins/
investor-alerts/crypto-scams.

24	 See SEC, Office of the Inspector General, The 
Inspector General’s Statement on the SEC’s 
Management and Performance Challenges (Oct. 
2024), https://www.sec.gov/files/statement-secs-
management-performance-challenges-october-2024.
pdf.

25	 Letter from the SEC Investor Advisory Committee to 
Gary Gensler, Chair, SEC (Apr. 6, 2023), https://www.
sec.gov/files/20230406-iac-letter-cryptocurrency.pdf.

26	 Federal Bureau of Investigation, 2023 Cryptocurrency 
Fraud Report, https://www.ic3.gov/AnnualReport/
Reports/2023_IC3CryptocurrencyReport.pdf 
(referencing error in the original).

27	 Press Release, Federal Trade Commission, As 
Nationwide Fraud Losses Top $10 Billion in 2023, 
FTC Steps Up Efforts to Protect the Public (Feb. 9, 
2024), http://www.ftc.gov/news-events/news/press-
releases/2024/02/nationwide-fraud-losses-top-10-
billion-2023-ftc-steps-efforts-protect-public.

28	 Federal Trade Commission, Protecting Older 
Consumers, 2023-2024 (Oct. 18, 2024), https://
www.ftc.gov/system/files/ftc_gov/pdf/federal-trade-
commission-protecting-older-adults-report_102024.pdf.

29	 SEC, Office of Investor Education and Advocacy, 
Artificial Intelligence (AI) and Investment Fraud 
(Jan. 25, 2024), https://www.investor.gov/
introduction-investing/general-resources/news-alerts/
alerts-bulletins/investor-alerts/artificial-intelligence-
fraud.

https://www.ftc.gov/system/files/ftc_gov/pdf/federal-trade-commission-protecting-older-adults-report_102024.pdf
https://www.ftc.gov/system/files/ftc_gov/pdf/federal-trade-commission-protecting-older-adults-report_102024.pdf
https://www.ftc.gov/system/files/ftc_gov/pdf/federal-trade-commission-protecting-older-adults-report_102024.pdf
https://home.treasury.gov/system/files/136/2024-National-Money-Laundering-Risk-Assessment.pdf#page=1
https://home.treasury.gov/system/files/136/2024-National-Money-Laundering-Risk-Assessment.pdf#page=1
https://home.treasury.gov/system/files/136/2024-National-Money-Laundering-Risk-Assessment.pdf#page=1
https://www.sec.gov/files/fy-2025-congressional-budget-justification.pdf#page=118
https://www.sec.gov/files/fy-2025-congressional-budget-justification.pdf#page=118
https://www.sec.gov/files/fy-2025-congressional-budget-justification.pdf#page=118
https://www.sec.gov/files/2025-exam-priorities.pdf
https://www.sec.gov/files/2025-exam-priorities.pdf
https://www.sec.gov/newsroom/meetings-events/sec-nasaa-georgia-secretary-state-joint-investor-roundtable
https://www.sec.gov/newsroom/meetings-events/sec-nasaa-georgia-secretary-state-joint-investor-roundtable
https://www.sec.gov/newsroom/meetings-events/sec-nasaa-georgia-secretary-state-joint-investor-roundtable
https://www.sec.gov/newsroom/press-releases/2024-86
https://www.sec.gov/newsroom/press-releases/2024-86
https://www.sec.gov/investor/alerts
https://www.sec.gov/exams
https://www.nasaa.org/investor-education/fraud-center/top-investor-threats
https://www.nasaa.org/investor-education/fraud-center/top-investor-threats
https://www.nasaa.org/investor-education/fraud-center/top-investor-threats
https://www.conemifyoucan.org/fraud-tools/index.html
https://www.conemifyoucan.org/fraud-tools/index.html
https://pcaobus.org/resources/information-for-investors/investor-advisories/investor-advisory-exercise-caution-with-third-party-verification-proof-of-reserve-reports
https://pcaobus.org/resources/information-for-investors/investor-advisories/investor-advisory-exercise-caution-with-third-party-verification-proof-of-reserve-reports
https://pcaobus.org/resources/information-for-investors/investor-advisories/investor-advisory-exercise-caution-with-third-party-verification-proof-of-reserve-reports
https://pcaobus.org/resources/information-for-investors/investor-advisories/investor-advisory-exercise-caution-with-third-party-verification-proof-of-reserve-reports
https://pcaobus.org/news-events/speeches/speech-detail/chair-williams-statement-on-rise-in-audit-deficiency-rates
https://pcaobus.org/news-events/speeches/speech-detail/chair-williams-statement-on-rise-in-audit-deficiency-rates
https://pcaobus.org/news-events/speeches/speech-detail/chair-williams-statement-on-rise-in-audit-deficiency-rates
https://www.iosco.org/library/pubdocs/pdf/IOSCOPD754.pdf
https://www.iosco.org/library/pubdocs/pdf/IOSCOPD754.pdf
https://www.iosco.org/library/pubdocs/pdf/IOSCOPD754.pdf
https://www.sec.gov/files/rules/proposed/2023/34-97990.pdf
https://www.sec.gov/files/rules/proposed/2023/34-97990.pdf
https://www.sec.gov/data/investor-complaints-data-archive
https://www.sec.gov/data/investor-complaints-data-archive
https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-alerts/crypto-scams
https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-alerts/crypto-scams
https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-alerts/crypto-scams
https://www.sec.gov/files/statement-secs-management-performance-challenges-october-2024.pdf
https://www.sec.gov/files/statement-secs-management-performance-challenges-october-2024.pdf
https://www.sec.gov/files/statement-secs-management-performance-challenges-october-2024.pdf
https://www.sec.gov/files/20230406-iac-letter-cryptocurrency.pdf
https://www.sec.gov/files/20230406-iac-letter-cryptocurrency.pdf
https://www.ic3.gov/AnnualReport/Reports/2023_IC3CryptocurrencyReport.pdf
https://www.ic3.gov/AnnualReport/Reports/2023_IC3CryptocurrencyReport.pdf
http://www.ftc.gov/news-events/news/press-releases/2024/02/nationwide-fraud-losses-top-10-billion-2023-ftc-steps-efforts-protect-public
http://www.ftc.gov/news-events/news/press-releases/2024/02/nationwide-fraud-losses-top-10-billion-2023-ftc-steps-efforts-protect-public
http://www.ftc.gov/news-events/news/press-releases/2024/02/nationwide-fraud-losses-top-10-billion-2023-ftc-steps-efforts-protect-public
https://www.ftc.gov/system/files/ftc_gov/pdf/federal-trade-commission-protecting-older-adults-report_102024.pdf
https://www.ftc.gov/system/files/ftc_gov/pdf/federal-trade-commission-protecting-older-adults-report_102024.pdf
https://www.ftc.gov/system/files/ftc_gov/pdf/federal-trade-commission-protecting-older-adults-report_102024.pdf
https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-alerts/artificial-intelligence-fraud
https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-alerts/artificial-intelligence-fraud
https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-alerts/artificial-intelligence-fraud
https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-alerts/artificial-intelligence-fraud


42  |   O F F I C E  O F  T H E  I N V E S T O R  A D V O C AT E

30	 Press Release, Federal Bureau of Investigation San 
Francisco Division, FBI Warns of Increasing Threat 
of Cyber Criminals Utilizing Artificial Intelligence 
(May 8, 2024), https://www.fbi.gov/contact-us/
field-offices/sanfrancisco/news/fbi-warns-of-
increasing-threat-of-cyber-criminals-utilizing-artificial-
intelligence. 

31	 National Security Agency, Federal Bureau of 
Investigation & Cybersecurity and Infrastructure 
Security Agency, Contextualizing Deepfake Threats 
to Organizations (Sept. 2023), https://media.
defense.gov/2023/Sep/12/2003298925/-1/-1/0/
CSI-deepfakethreats.pdf.

32	 Supra endnote 23.
33	 INTERPOL, Financial Fraud Assessment: A 

Global Threat Boosted by Technology at 11 (Mar. 
11, 2024), https://www.interpol.int/en/News-and-
Events/News/2024/INTERPOL-Financial-Fraud-
assessment-A-global-threat-boosted-by-technology 
(report found at bottom of news release).

34	 World Economic Forum, The Global Risks Report 
2024 (Jan. 2024), https://www3.weforum.org/docs/
WEF_The_Global_Risks_Report_2024.pdf.

35	 Id.
36	 See Exchange Act § 4(g)(4)(B), 15 U.S.C. § 78d(g)(4)

(B).
37	 See Exchange Act § 4(g)(4)(D-E), 15 U.S.C. § 78d(g)

(4)(D-E).
38	 See Exec. Order No. 13563, 3 C.F.R. 13563 (2011).
39	 See Exchange Act § 4(g)(4)(C), 15 U.S.C. § 78d(g)(4)

(C).
40	 In this section of the report, we refer to the 

Office of Investor Research (OIR) and POSITIER 
synonymously.

41	 SEC, Office of the Investor Advocate, Report on 
Activities, Fiscal Year 2022 (Dec. 15, 2022), https://
www.sec.gov/files/fy22-oiad-sar-activities-report.
pdf (see subsection titled Helping Investors Make 
Decisions About Mutual Funds Using Visual Aids). 

42	 Interpretative Releases Relating to the Investment 
Advisers Act of 1940 and General Rules and 
Regulations Thereunder, 17 C.F.R. § 276.

43	 Katherine Carman, Alycia Chin, Jonathan Cook, 
Steven B. Nash, Brian Scholl & David B. Zimmerman, 
The Thoughtful Households Relating InVesting 
Experiences (THRIVE) Panel (Sept. 2024),  
https://www.sec.gov/files/thrive-panel-technical-
documentation.pdf. 

44	 SEC, Office of the Investor Advocate, Report on 
Activities, Fiscal Year 2023 (Dec. 5, 2023), https://
www.sec.gov/files/2023-oiad-annual-report.pdf (see 
section titled “Registered Index-Linked Annuities 
(RILAs)”).

45	 Andrew Mercer, Oversampling is Used to Study Small 
Groups, Not Bias Poll Results, Pew Research Center 
(Oct. 25, 2016), https://www.pewresearch.org/short-
reads/2016/10/25/oversampling-is-used-to-study-
small-groups-not-bias-poll-results.

46	 See Board of Governors of the Federal Reserve 
System, Survey of Consumer Finances, 1989 – 2022 
(Nov. 2, 2023), https://www.federalreserve.gov/
econres/scf/dataviz/scf/chart/#series:Retirement_
Accounts;demographic:all;population:1;units:have.

47	 See FINRA Investor Education Foundation, Financial 
Capability in the United States (July 2022), https://
www.finrafoundation.org/sites/finrafoundation/files/
NFCS-Report-Fifth-Edition-July-2022.pdf (author’s 
calculations from data).

48	  Board of Governors of the Federal Reserve System, 
Survey of Household Economics and Decisionmaking 
(Oct. 7, 2024), https://www.federalreserve.gov/
consumerscommunities/shed_data.htm (see author’s 
calculations from data).

49	 Michelle Faverio, Wyatt Dawson & Olivia Sidoti, 
Majority of Americans Aren’t Confident in the Safety 
and Reliability of Cryptocurrency, Pew Research 
Center (Oct. 24, 2024), https://www.pewresearch.
org/short-reads/2024/10/24/majority-of-americans-
arent-confident-in-the-safety-and-reliability-of-
cryptocurrency.

50	 SEC, Office of the Investor Advocate, Report on 
Activities, Fiscal Year 2022 (Dec. 15, 2022), https://
www.sec.gov/files/fy22-oiad-sar-activities-report.pdf 
(see section titled Helping Investors Make Decisions 
About Mutual Funds Using Visual Aids); see also the 
published, peer-reviewed version of the research, Brian 
Scholl, Adam Craig & Alycia Chin, A Picture is Worth 
a Thousand Dollars: Visual Aids Promote Investor 
Decisions, 8 Journal of the Association for Consumer 
Research 416 (2023), https://www.journals.uchicago.
edu/doi/abs/10.1086/726428?journalCode=jacr.

51	 Alycia Chin, David Zimmerman, Jonathan Cook, 
Katherine Carman & Brian Scholl, Investor Testing 
on Registered Investment Company Fee Meters (SEC, 
Working Paper No. 2024-01, 2024), https://www.sec.
gov/files/ric-fees-report.pdf.

52	 See Ali Hortaçsu & Chad Syverson, Product 
Differentiation, Search Costs, and Competition 
in the Mutual Fund Industry: A Case Study 
of S&P 500 Index Funds, 119 The Quarterly 
Journal of Economics 403 (2004), https://doi.
org/10.1162/0033553041382184; Brian Scholl, Adam 
Craig & Alycia Chin, A Picture is Worth a Thousand 
Dollars: Visual Aids Promote Investor Decisions, 8 
Journal of the Association for Consumer Research 
416 (2023), https://www.journals.uchicago.edu/doi/
abs/10.1086/726428?journalCode=jacr.

53	 See Michael J. Cooper, Michael Halling & Wenhao 
Yang, The Persistence of Fee Dispersion Among 
Mutual Funds, 25 Review of Finance 365 (2021); 
https://doi.org/10.1093/rof/rfaa023; Investment 
Company Institute, Investment Company Fact Book 
(2023), https://www.ici.org/system/files/2023-05/2023-
factbook.pdf.

54	 See Brian Scholl, Adam Craig & Alycia Chin, 
A Picture is Worth a Thousand Dollars: Visual 
Aids Promote Investor Decisions, 8 Journal of 
the Association for Consumer Research 416 
(2023), https://www.journals.uchicago.edu/doi/
abs/10.1086/726428?journalCode=jacr.

55	 SEC, Office of Investor Education and Advocacy, 
Time Horizon, https://www.investor.gov/introduction-
investing/investing-basics/glossary/time-horizon (last 
visited Dec. 2, 2024).

56	 See Interpretative Releases Relating to the Investment 
Advisers Act of 1940 and General Rules and 
Regulations Thereunder, 17 C.F.R. § 276.

https://www.fbi.gov/contact-us/field-offices/sanfrancisco/news/fbi-warns-of-increasing-threat-of-cyber-criminals-utilizing-artificial-intelligence
https://www.fbi.gov/contact-us/field-offices/sanfrancisco/news/fbi-warns-of-increasing-threat-of-cyber-criminals-utilizing-artificial-intelligence
https://www.fbi.gov/contact-us/field-offices/sanfrancisco/news/fbi-warns-of-increasing-threat-of-cyber-criminals-utilizing-artificial-intelligence
https://www.fbi.gov/contact-us/field-offices/sanfrancisco/news/fbi-warns-of-increasing-threat-of-cyber-criminals-utilizing-artificial-intelligence
https://media.defense.gov/2023/Sep/12/2003298925/-1/-1/0/CSI-deepfakethreats.pdf
https://media.defense.gov/2023/Sep/12/2003298925/-1/-1/0/CSI-deepfakethreats.pdf
https://media.defense.gov/2023/Sep/12/2003298925/-1/-1/0/CSI-deepfakethreats.pdf
https://www.interpol.int/en/News-and-Events/News/2024/INTERPOL-Financial-Fraud-assessment-A-global-threat-boosted-by-technology
https://www.interpol.int/en/News-and-Events/News/2024/INTERPOL-Financial-Fraud-assessment-A-global-threat-boosted-by-technology
https://www.interpol.int/en/News-and-Events/News/2024/INTERPOL-Financial-Fraud-assessment-A-global-threat-boosted-by-technology
https://www3.weforum.org/docs/WEF_The_Global_Risks_Report_2024.pdf
https://www3.weforum.org/docs/WEF_The_Global_Risks_Report_2024.pdf
https://www.sec.gov/files/fy22-oiad-sar-activities-report.pdf
https://www.sec.gov/files/fy22-oiad-sar-activities-report.pdf
https://www.sec.gov/files/fy22-oiad-sar-activities-report.pdf
https://www.sec.gov/files/thrive-panel-technical-documentation.pdf
https://www.sec.gov/files/thrive-panel-technical-documentation.pdf
https://www.sec.gov/files/2023-oiad-annual-report.pdf
https://www.sec.gov/files/2023-oiad-annual-report.pdf
https://www.sec.gov/files/2023-oiad-annual-report.pdf
https://www.pewresearch.org/short-reads/2016/10/25/oversampling-is-used-to-study-small-groups-not-bi
https://www.pewresearch.org/short-reads/2016/10/25/oversampling-is-used-to-study-small-groups-not-bi
https://www.pewresearch.org/short-reads/2016/10/25/oversampling-is-used-to-study-small-groups-not-bi
https://www.federalreserve.gov/econres/scf/dataviz/scf/chart/#series:Retirement_Accounts;demographic
https://www.federalreserve.gov/econres/scf/dataviz/scf/chart/#series:Retirement_Accounts;demographic
https://www.federalreserve.gov/econres/scf/dataviz/scf/chart/#series:Retirement_Accounts;demographic
https://www.finrafoundation.org/sites/finrafoundation/files/NFCS-Report-Fifth-Edition-July-2022.pdf
https://www.finrafoundation.org/sites/finrafoundation/files/NFCS-Report-Fifth-Edition-July-2022.pdf
https://www.finrafoundation.org/sites/finrafoundation/files/NFCS-Report-Fifth-Edition-July-2022.pdf
https://www.finrafoundation.org/knowledge-we-gain-share/nfcs/data-and-downloads
https://www.federalreserve.gov/consumerscommunities/shed_data.htm
https://www.federalreserve.gov/consumerscommunities/shed_data.htm
https://www.pewresearch.org/short-reads/2024/10/24/majority-of-americans-arent-confident-in-the-safe
https://www.pewresearch.org/short-reads/2024/10/24/majority-of-americans-arent-confident-in-the-safe
https://www.pewresearch.org/short-reads/2024/10/24/majority-of-americans-arent-confident-in-the-safe
https://www.pewresearch.org/short-reads/2024/10/24/majority-of-americans-arent-confident-in-the-safe
https://www.pewresearch.org/short-reads/2016/10/25/oversampling-is-used-to-study-small-groups-not-bi
https://www.sec.gov/files/fy22-oiad-sar-activities-report.pdf
https://www.sec.gov/files/fy22-oiad-sar-activities-report.pdf
https://www.journals.uchicago.edu/doi/abs/10.1086/726428?journalCode=jacr
https://www.journals.uchicago.edu/doi/abs/10.1086/726428?journalCode=jacr
https://www.journals.uchicago.edu/doi/abs/10.1086/726428?journalCode=jacr
https://www.sec.gov/files/ric-fees-report.pdf
https://www.sec.gov/files/ric-fees-report.pdf
https://doi.org/10.1162/0033553041382184
https://doi.org/10.1162/0033553041382184
https://www.journals.uchicago.edu/doi/abs/10.1086/726428?journalCode=jacr
https://www.journals.uchicago.edu/doi/abs/10.1086/726428?journalCode=jacr
https://doi.org/10.1093/rof/rfaa023
https://www.ici.org/system/files/2023-05/2023-factbook.pdf
https://www.ici.org/system/files/2023-05/2023-factbook.pdf
https://www.journals.uchicago.edu/doi/abs/10.1086/726428?journalCode=jacr
https://www.journals.uchicago.edu/doi/abs/10.1086/726428?journalCode=jacr
https://www.investor.gov/introduction-investing/investing-basics/glossary/time-horizon
https://www.investor.gov/introduction-investing/investing-basics/glossary/time-horizon
https://www.investor.gov/introduction-investing/investing-basics/glossary/time-horizon


R E P O R T  O N  A C T I V I T I E S :  F I S C A L  Y E A R  2 0 2 4   |   43

57	 See Regulation Best Interest: The Broker Dealer 
Standard of Conduct, 17 C.F.R. §240 (see also 84 Fed. 
Reg. 33,318).

58	 David Zimmerman, Alycia Chin & Wändi Bruine De 
Bruin, Question Design Matters: Response Options 
Influence the Length of Reported Financial Time 
Horizons (SEC, Working Paper No. 2024 – 02, 2024), 
https://www.sec.gov/files/impact-response-options-
financial-time-horizons.pdf.

59	 For surveys using financial time horizons, see Board 
of Governors of the Federal Reserve System, 2023 
Survey of Consumer Finances (2023), https://www.
federalreserve.gov/econres/scfindex.htm; Olivier 
Armantier, Giorgio Topa, Wilbert van der Klaauw, & 
Basit Zafar, An Overview of the Survey of Consumer 
Expectations, 23 Economic Policy Review 51 (2017), 
https://www.newyorkfed.org/research/epr/2017/
epr_2017_overview-of-sce_armantier. For research 
examining how time horizons pertain to investment 
related financial decisions, see Harvey S. Rosen & 
Stephen Wu, Portfolio Choice and Health Status, 72 
Journal of Financial Economic 457 (2004), https://
doi.org/10.1016/S0304-405X(03)00178-8; see also 
Kenneth J. White Jr. & Stuart J. Heckman, Financial 
Planner use among Black and Hispanic Households, 29 
Journal of Financial Planning 40 (2016), https://www.
financialplanningassociation.org/article/journal/SEP16-
financial-planner-use-among-black-and-hispanic-
households.

60	 Vera Toepoel, Corrie Vis, Marcel Das & Arthur 
Van Soest, Design of Web Questionnaires: An 
Information-Processing Perspective for the Effect of 
Response Categories, 37 Sociological Methods & 
Research 371 (2009), https://journals.sagepub.com/
doi/10.1177/0049124108327123.

61	 Zvi Bodie, Robert C. Merton & William F. 
Samuelson, Labor Supply Flexibility and Portfolio 
Choice in a Life Cycle Model, 16 Journal of Economic 
Dynamics and Control 427 (1992), https://doi.
org/10.1016/0165-1889(92)90044-F.

62	 Exchange Act Section 4(g)(8)(B)(i), 15 U.S.C. § 78d(g)(8)
(B)(i).

63	 Exchange Act Section 4(g)(8)(D), 15 U.S.C. § 78d(g)(8)(D).
64	 Exchange Act Section 4(g)(8)(B),(D), 15 U.S.C. § 78d(g)(8)

(B),(D).
65	 The 12 Primary Issue Categories can be defined as 

follows:
1.	 Allegations of Securities Law Violations: Investor 

alleges that an individual, firm, or entity has 
violated or is violating the U.S. securities laws.

2.	 Atypical matters: Matters of undetermined or 
harassing nature. 

3.	 FINRA Complaints/Questions/Procedures: 
Questions or complaints relating to a FINRA 
investigation or arbitration, a FINRA employee, or 
about FINRA rules, policies, or procedures. 

4.	 Inquiries about Corporate Disclosure/Registration: 
Questions about SEC filings and other matters 
relating to corporate disclosure. 

5.	 Investment Products—Questions/Complaints: 
Questions or complaints about a specific type of 
investment product. 

6.	 Investor Account Matters: Questions or 
complaints relating to a retail investor’s personal 
investments or finances. 

7.	 Non-SEC/Other Matters: Questions or complaints 
about issues that do not fall within the SEC’s 
jurisdiction. 

8.	 Other SEC Questions/Complaints: Questions or 
complaints about the SEC, including its policies, 
procedures, rules, and employees. 

9.	 Other SRO Complaints/Questions/Procedures: 
Questions or complaints relating to the policies, 
procedures, or rules of an SRO other than FINRA. 

10.	Potential Organized Campaign: Submission 
appears to be part of a coordinated effort by 
multiple individuals to contact the Ombuds’ Office 
about the same issue. 

11.	SEC Investigations/Litigation/Enforcement 
Actions: Questions or complaints about SEC 
investigations, litigation, or other related issues, 
such as distributions. 

12.	SEC/Other Impersonators: Complaints about SEC 
or SRO impersonators, and complaints involving 
fraudulent use of the SEC or SRO seal. 

66	 Effective October 1, 2023 (FY2024), the primary 
category label used for allegations of fraud or 
securities law violations (“Allegations of Securities 
Law Violations/Fraud”) became “Allegations of 
Securities Law Violations,” which encompasses fraud. 
During fiscal year 2024, three matters reflecting 
the prior primary category label were reopened and 
processed by staff. Because these matters appropriately 
fit the new label, “Allegations of Securities Law 
Violations,” we have included them in the count for 
that primary category in fiscal year 2024.

67	 The primary issue categories “Securities Laws/Rules/
Regulations,” and “SEC Questions/Complaints” were 
assigned to matters created before the establishment 
of the current primary issue categories. These older 
matters were reopened in fiscal year 2024. See n. 66, 
infra.

68	 The Ombuds Office received ninety-one matters 
involving SEC or other impersonators in fiscal 
year 2024, virtually all of which involved fraud. 
To obtain a more accurate reflection of the volume 
of fraud complaints for this calculation, we have 
combined the number of SEC/other impersonations 
(ninety-one) with the number of allegations of 
securities law violations (247), for a total of 338 
reported allegations of fraud and other securities 
law violations. This number reflects a 41% increase 
over the 240 allegations of fraud and securities law 
violations received in fiscal year 2023. See SEC, Office 
of the Investor Advocate, Report on Activities, Fiscal 
Year 2023, at 35 (Dec. 5, 2023), https://www.sec.gov/
files/2023-oiad-annual-report.pdf.

69	 See Report, infra, at 10-13.

https://www.sec.gov/files/impact-response-options-financial-time-horizons.pdf
https://www.sec.gov/files/impact-response-options-financial-time-horizons.pdf
https://www.federalreserve.gov/econres/scfindex.htm
https://www.federalreserve.gov/econres/scfindex.htm
https://www.newyorkfed.org/research/epr/2017/epr_2017_overview-of-sce_armantier
https://www.newyorkfed.org/research/epr/2017/epr_2017_overview-of-sce_armantier
https://doi.org/10.1016/S0304-405X(03)00178-8
https://doi.org/10.1016/S0304-405X(03)00178-8
https://www.financialplanningassociation.org/article/journal/SEP16-financial-planner-use-among-black-and-hispanic-households
https://www.financialplanningassociation.org/article/journal/SEP16-financial-planner-use-among-black-and-hispanic-households
https://www.financialplanningassociation.org/article/journal/SEP16-financial-planner-use-among-black-and-hispanic-households
https://www.financialplanningassociation.org/article/journal/SEP16-financial-planner-use-among-black-and-hispanic-households
https://journals.sagepub.com/doi/10.1177/0049124108327123
https://journals.sagepub.com/doi/10.1177/0049124108327123
https://doi.org/10.1016/0165-1889(92)90044-F
https://doi.org/10.1016/0165-1889(92)90044-F
https://www.sec.gov/files/2023-oiad-annual-report.pdf
https://www.sec.gov/files/2023-oiad-annual-report.pdf


44  |   O F F I C E  O F  T H E  I N V E S T O R  A D V O C AT E

70	 See SEC, Office of Investor Education and Advocacy, 
Investor Bulletin: Initial Coin Offerings (July 25, 
2017), https://www.investor.gov/introduction-
investing/general-resources/news-alerts/alerts-
bulletins/investor-bulletins-16; See also Lori Schock, 
Director, SEC, Office of Investor Education and 
Advocacy, Thinking about Buying the Latest New 
Cryptocurrency or Token?, https://www.investor.gov/
additional-resources/spotlight/directors-take/thinking-
about-buying-latest-new-cryptocurrency-or (last 
visited Sept. 6, 2024).

71	 See generally Friedrich Schneider & Dominik 
Enste, Hiding in the Shadows: The Growth of the 
Underground Economy, International Monetary Fund 
(2002), https://www.imf.org/external/pubs/ft/issues/
issues30.

72	 See, e.g., U.S. Department of State, Online 
Recruitment of Vulnerable Populations for Forced 
Labor (June 2023), https://www.state.gov/wp-content/
uploads/2023/12/Online-Recruitment-of-Vulnerable-
Populations-for-Forced-Labor.pdf; Federal Bureau of 
Investigation, Public Service Announcement: The FBI 
Warns of False Job Advertisements Linked to Labor 
Trafficking at Scam Compounds (May 22, 2023), 
https://www.ic3.gov/PSA/2023/psa230522.

73	 See id.
74	 See generally United Nations, Human Rights Office 

of the High Commissioner, Online Scam Operations 
and Trafficking into Forced Criminality in Southeast 
Asia: Recommendations for a Human Rights 
Response (Dec. 2023), https://bangkok.ohchr.org/
wp-content/uploads/2023/08/ONLINE-SCAM-
OPERATIONS-2582023.pdf.

75	 See id.

https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins-16
https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins-16
https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins-16
https://www.investor.gov/additional-resources/spotlight/directors-take/thinking-about-buying-latest-new-cryptocurrency-or
https://www.investor.gov/additional-resources/spotlight/directors-take/thinking-about-buying-latest-new-cryptocurrency-or
https://www.investor.gov/additional-resources/spotlight/directors-take/thinking-about-buying-latest-new-cryptocurrency-or
https://www.imf.org/external/pubs/ft/issues/issues30
https://www.imf.org/external/pubs/ft/issues/issues30
https://www.state.gov/wp-content/uploads/2023/12/Online-Recruitment-of-Vulnerable-Populations-for-Forced-Labor.pdf
https://www.state.gov/wp-content/uploads/2023/12/Online-Recruitment-of-Vulnerable-Populations-for-Forced-Labor.pdf
https://www.state.gov/wp-content/uploads/2023/12/Online-Recruitment-of-Vulnerable-Populations-for-Forced-Labor.pdf
https://www.ic3.gov/PSA/2023/psa230522
https://bangkok.ohchr.org/wp-content/uploads/2023/08/ONLINE-SCAM-OPERATIONS-2582023.pdf
https://bangkok.ohchr.org/wp-content/uploads/2023/08/ONLINE-SCAM-OPERATIONS-2582023.pdf
https://bangkok.ohchr.org/wp-content/uploads/2023/08/ONLINE-SCAM-OPERATIONS-2582023.pdf




U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549