Brokers Exploit 79-Year-Old Client With Dementia
How To Protect Your Senior Loved Ones
The Financial Industry Regulatory Authority (FINRA) is the agency that polices stockbrokers and brokerage firms for compliance with laws meant to protect clients, including seniors, from fraud. In one recent case, FINRA permanently banned a broker from any principal job in the securities industry from failing to properly supervise two brokers who abused the accounts of a 79-year-old customer suffering from dementia. The San Francisco financial elder abuse attorneys at Evans Law Firm, Inc. represent seniors financially exploited by stockbrokers, insurance agents, financial advisors, caregivers, trustees, agents under Powers of Attorney, and others financially exploiting seniors. If you or someone you know is over 60 and lives in California and is a victim of financial elder abuse, call us today at 415-441-8669.
In the reported case, the two brokers made unauthorized trades in the senior’s account that generated over $9 million in commissions. FINRA found that their supervisor ignored multiple “red flags” that would have identified the excessive and unsuitable trading conducted by the two brokers. The customer filed a FINRA arbitration alleging that the brokerage firm’s branch manager was liable for unsuitable recommendations, unauthorized trading, churning and other violations of state securities laws. The FINRA arbitration panel awarded the customer over $32 million.
What To Look For
Stockbrokers, insurance agents, financial advisors, caregivers and others are all in positions to financially exploit seniors. To help prevent the financial exploitation of a senior loved one, here are some questions you should ask your senior loved one regularly:
- Review a senior’s financial account statements closely. Look for suspicious trading activity or unusual or risky investments that appear in the account.
- Has a broker or other salesperson, such as an insurance agent or reverse mortgage broker, approached the senior recently with new investment recommendations? Agents and brokers target seniors with commission-generating products, like annuities, insurance and reverse mortgages. Has he or she been invited to any “free lunch” seminars? If so, warn them not to go! Those are traps for hard sells.
- Has a caregiver come into their life who’s helping with bills and finances? This is a serious red flag. Do not allow caregivers access to any financial information or cards, checks or cash. If your loved one needs help paying bills/writing checks, get a professional fiduciary. A caregiver’s responsibility should be strictly limited to care and never extend to finances, money or important legal documents. Never grant a caregiver a Power of Attorney over financial matters.
- Does your loved one need help with investment decisions? Offer to help. The senior may be reluctant or embarrassed to ask for help even though they realize their ability to handle financial matters on their own is slipping.
- Are bills being paid on time? Look around the house for unpaid bills. They may be piling up.
- Has anyone approached the senior about managing his or her money? Financial advisors and “planners” target older persons. While professional help may be needed, use caution. Look for fee-based financial advisors and avoid any that earn commissions on sales to the senior.
- Are there financial safeguards like Powers of Attorney or Living Trusts in place? Safeguards are really useful but only work if the appointed attorney-in-fact or trustee is a trusted, competent, responsible individual. And, again, never give a Power of Attorney to a caregiver.
If you or a loved one been the victim of financial elder abuse in San Francisco or elsewhere in California, contact Ingrid M. Evans and the other Evans Law Firm annuity fraud attorneys at (415) 441-8669, or by email at <a href=”mailto:email@example.com”>firstname.lastname@example.org</a>. Our attorneys have experience with complex financial contracts and large insurance companies. We can help guide your case through a jury trial or toward an equitable settlement. We handle cases involving physical and financial elder abuse, qui tam and whistleblower law, nursing home abuse, whole life insurance and universal life insurance, and indexed, variable, and fixed annuities.
 Evans Law Firm, Inc. was not involved in the case in any way.