Elder Financial Abuse by Brokers and Investment Advisers

Older investors, age 65 and older, remain one of the most vulnerable populations at risk of becoming the victims of financial frauds and investment and bond losses. Sometimes, the perpetrator is a family member, a friend, or another trusted adult, such as a caregiver or a guardian. In other instances, the fraudster may be a broker or a financial adviser. This is someone with a fiduciary duty to act in the elder investor's best interests and whose job is to properly oversee and invest the customer's individual retirement account (IRA), brokerage account, or other savings while keeping their money safe.

Shepherd Smith Edwards and Kantas (SSEK Law Firm) represents older investors, including retirees and other seniors, and their families against the brokers and investment advisers who either purposely defrauded them or were negligent in managing their money. Over the years, our elder financial abuse attorneys and securities lawyers have helped thousands of senior investors to recoup their losses and other damages.

One of the reasons why seniors are a popular target of investment or broker fraud is that many of them have money accumulated and saved after many years of hard work. These are the funds that are supposed to support them after they retire, which is why older people are conservative investors who cannot take on much risk.

For a bad broker managing a senior investor's money, this means there are funds to misappropriate. This is not only illegal, but it is outright theft. Stockbroker fraud becomes even easier to commit when the victim is in poor health, frail, or suffering from some form of diminished mental capacity, such as dementia or Alzheimer's. Unfortunately, there are financial professionals who will seek to take advantage of this type of situation.

Here are a few ways in which a broker may commit senior investment or broker fraud:

• Overconcentration: This involves investing too much of an older investor's portfolio in one type of investment rather than diversifying. This can increase the risk of loss should that financial product plunge in value.
• Risky Investments: Investing a conservative senior's funds in risky investments, such as private placements, nontraded real estate investment trusts (nontraded REITs), exchange-traded funds (ETFs), business development companies (BDCs), structured products, oil and gas investments, collateralized loan obligations (CLOs), or collateralized debt obligations (CDOs).
• Churning: Excessive trading in an elderly customer's account for the purposes of generating commissions.
• Unauthorized trading in a senior investor's brokerage account without their knowing/official consent or without the firm's permission.
• Unauthorized withdrawals: Making unauthorized withdrawals and transfers from the older customer's account.
• Unsuitable investments: Using a senior investor's money to purchase financial products or funds that are inappropriate for their risk tolerance level or goals will generate high commissions for the financial representative.
• Exploitation: Exploiting an older investor's funds in other ways, including borrowing money from that customer, making themselves the benefactor of their will, or stealing their money.
• Negligence. This doesn't necessarily involve the intent to commit elder investment fraud or other willful misconduct. Rather, the broker acted carelessly, cluelessly, or failed to act at all, causing the older investor to suffer financial harm.

For an older investor to suffer significant financial losses at this late stage in life, the consequences can be devastating. It may impact their ability to support themselves or pay for crucial medical care. Brokerage firms and their registered representatives know all of this.

Yet, year after year, tens of thousands of seniors continue to lose a lifetime of savings because a broker or financial adviser mishandled or misappropriated their money. When this happens, it's not just the financial professional that should be held liable for elder investor fraud. The broker-dealer that did not protect them and failed to properly supervise their registered representative also should be held accountable for damages.

For 30 years, SSEK Law Firm has helped seniors and retirees recover their losses caused by the negligent and fraudulent actions of brokers and their firms. We represent older investors and their families nationwide and have recovered many millions of dollars on our client's behalf. Contact our senior investor fraud attorneys, securities attorneys and investment loss lawyers today.