Protections Seniors from Investment Fraud
The Origin of Investment Fraud
In this age of “Retirement Shortfalls” and rising costs of seniors living, the elderly often feel under increased pressure not to be a burden on their families, and to try to leave something behind when the pass on. Unfortunately, this desire may leave seniors with less financial savvy, or even worse, those with memory or cognition problems, as easy prey for scammers, con artists, and unscrupulous investors. The number and variety of scams is vast and ever-changing, but one type that is increasing in prominence is the “binary option.”
What is a Binary Option?
Options are a type of investment that, while somewhat arcane, is a legitimate product for Walls Street investors and hedge funds to add to their portfolios. While serious amateur investors and day traders may purchase them, it is hardly common or well-advised for seniors to put their saving into options. Our San Francisco investment fraud attorneys have seen cases in the past where seniors were misled into putting their money into products they didn’t fully understand.
Recently, an even more worrisome subset of options has become the weapon of choice for con artists targeting the elderly for financial abuse. Options essentially allow the purchaser to buy or sell stock at a set price at a set time: if the price at that time is above what the option lays out, the buy makes money; if it’s below, the seller makes money. A Binary option, on the other hand, essentially pays out if and only if the stock is above or below a certain amount. If the bet doesn’t pay off, all the money used to purchase the option is lost. The game is not unlike roulette: a gambler places their money on red or black, and if they’re wrong, they lose all of it.
It goes without saying that this is already a high-risk investment. But to make matters worse, con artist are using the tantalizingly high returns such investments offer as an inducement for seniors to trust them with their money. Unfortunately, a number of online binary options trading platforms are fraudulent, selling products that are unregistered with the SEC, and which can dissolve and disappear with senior investors’ money overnight. In one fell swoop, senior’s dreams of a safe retirement can vanish.
Protecting Seniors from Investment Fraud
Our San Francisco investment fraud attorneys always advise seniors to be open about their finances with trusted friends and family, and to seek advice from neutral financial professionals before making any major decisions. Unfortunately, this doesn’t always happen, and when money is lost to fly-by-night operations, it can be difficult to find legal ways to recover it. The best strategy is to talk to seniors, discuss their financial goals and fears, and work with family, friends, and professionals to decide on what steps need to be taken to protect them from unscrupulous individuals.
If you or a loved one has experienced SEC investment fraud in California, contact the Evans Law Firm investment fraud attorneys at (415) 441-8669, or by email at firstname.lastname@example.org. 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.