6The Consumer Financial Protection Bureau reports that financial exploitation of the elderly reaches up to $36.5 billion in losses each year. Unfortunately, some of this exploitation is perpetrated by the very individuals who are supposed to help older customers obtain a secure financial future, including stockbrokers and investment advisors.
If you or a family member was taken advantage of by a stockbroker, investment advisor, or other financial professional, an experienced elder financial abuse lawyer from Erez Law, PLLC can help explain your legal options during a free and confidential consultation. Our attorneys are knowledgeable about all forms of financial fraud and have recovered over $200 million for victims. We have over 20 years of experience and a 99% success rate, making us uniquely equipped to help with these sensitive matters.
Contact us today to learn more about how you can protect yourself or a loved one from further financial abuse or exploitation.
What Is Elder Financial Exploitation?
Various state and federal laws are designed to protect older adults from financial abuse. These laws define financial exploitation differently. However, they typically describe financial exploitation or fraud against the elderly as a crime or civil wrong in which someone takes advantage of another person due to their vulnerability caused by age or disability. Financial exploitation is a form of elder abuse and should not be tolerated.
The National Adult Protective Services Association defines financial exploitation as financial abuse perpetrated on the elderly or an adult with disabilities. This form of elder abuse is often perpetrated by someone close to the vulnerable adult, such as a stockbroker, investment advisor, other financial professional, trustee, or custodian.
The U.S. Department of Justice provides several examples of elder financial exploitation, including the following:
- Illegal or improper use of an elderly individual’s money, property, or other resources for personal gain
- Use of an incapacitated adult’s resources for another’s profit or advantage
- The illegal or improper withholding of an elderly individual’s property, income, resources, or trust funds
- The use of deception, intimidation, or undue influence by a person in a position of trust to obtain or use the elderly individual’s property, income, resources, or trust funds
- Power of attorney financial abuse in which an agent intentionally takes financial advantage of the principal
- The misuse of a power of attorney, trust, or a guardianship appointment that results in the unauthorized sale or transfer of property, income, resources, or trust funds for someone else’s benefit
- The use of an elderly person’s income or resources by a person who knows the elderly person lacks the mental capacity to authorize such use
Duty to Protect the Elderly from Financial Exploitation
Securities brokerage firms and the stockbrokers they employ have a duty to protect elderly and vulnerable customers from financial exploitation. Financial Industry Regulatory Authority (FINRA) rules allow members to place temporary holds on the accounts of specified adults when they have a reasonable belief of financial exploitation of these individuals. Specified adults include any customer age 65 or older or with a physical or mental impairment that renders them unable to adequately protect their interests.
Additionally, members are required to make reasonable efforts to obtain the name and contact information of a trusted contact person. They must inform their customers that the broker can disclose any necessary information about the account connected to suspected financial exploitation. The broker can discuss the situation with the trusted contact before deciding to put a hold on the account.
How Do Brokers and Financial Advisors Commit to Financial Exploitation?
While stockbrokers are supposed to protect elderly investors from possible scams, some may perpetuate fraud upon them. Brokers may recommend financial products or services that are not appropriate or suitable for an elderly client’s situation. Brokers, investment advisors, and other financial professionals may use the following tactics to take advantage of vulnerable investors:
- Getting them to sign a power of attorney documents that give them unfettered access and control over their finances
- Convincing older investors to allow them complete management of their bank or brokerage accounts
- Selling unsuitable structured products or non-conventional investments simply to make high commissions from the trades
- Instructing elderly customers to write them personal checks for supposed investments that are not available through the brokerage firm
- Committing security schemes, such as Ponzi or pyramid schemes
- Pressuring seniors to purchase variable annuities, indexed annuities, or other investments with high commissions, expensive riders, or high surrender fees
If a broker makes an unsuitable investment suggestion or defrauds investors, they should be held accountable.
Signs of Elder Financial Abuse by a Broker or Investment Advisor
Here are some signs that you or a loved one may be the victim of financial exploitation by a broker or investment advisor:
- Added account holders or beneficiaries to bank or brokerage accounts
- Closing long-established bank or investment accounts
- Recent significant financial losses
- Unexpected changes to legal documents, such as a power of attorney
- Unwillingness to discuss finances
- Unexplained transfer of assets
- Excessive trading or too many transactions, which may indicate the broker is trading solely to generate commissions rather than achieving the customer’s investment goals
- Transactions the customer does not recognize or did not authorize
- Too much proportion of an investment portfolio in a single stock, sector, or asset class
- Use of margin to borrow money from the brokerage firm to purchase additional investments
If you notice any of these signs of financial exploitation, contact an experienced elder financial abuse attorney from Erez Law, PLLC for help.
How Do I Report Elder Financial Abuse?
As a concerned loved one, you are in a unique position to help protect a person you care about from financial abuse and exploitation. If you suspect elder financial abuse, you can report it by:
- Filing a complaint with the U.S. Securities and Exchange Commission by calling (800) SEC-0330
- Reporting investment fraud to FINRA by calling (844) 574-3577
- Reporting financial abuse to Adult Protective Services
- Informing the local district attorney’s office of any crimes that were committed
You can also reach out to an attorney for elder financial abuse at Erez Law, PLLC for assistance.
How Our Elder Financial Abuse Lawyers Can Advocate for You
An elder financial abuse attorney can be your trusted advocate during this difficult time. They have the unique skills and resources to help identify financial abuse and the parties responsible for it.
Elder financial abuse attorneys understand the unique factors that can impact these cases. We can help gather evidence regarding the exploitative acts that harmed your loved one. With a strong understanding of legal and financial matters, our elder financial abuse attorneys can describe your legal options and devise a customized legal strategy for your case. A lawyer can also represent you in arbitration or court proceedings to pursue monetary compensation for your losses.
Contact Our Nationwide Elder Financial Abuse Attorneys Today
If you or a loved one lost substantial value in your investment accounts that you suspect was caused by broker abuse, an elder financial abuse lawyer from Erez Law, PLLC can help. These cases are often complex, and you can benefit from the assistance of a knowledgeable investment fraud lawyer. Contact us today for your free and confidential case consultation with a lawyer experienced in handling claims based on broker misconduct and negligence.