The increasing number of senior citizens has resulted in an increase in the number of corrupt financial advisors looking to make a commission by persuading trusting seniors to buy unsuitable financial products, such as variable annuities, and engage in other inappropriate financial strategies, according to a July 2009 article in Trial magazine by Ingrid M. Evans and David L. Cheng, called “Protecting seniors from financial abuse.”
State securities regulators have also warned that senior financial abuse is on the rise, and that designations such as “Certified Senior Advisor” are often bogus. In fact, a recent survey of state securities regulators conducted by the North American Securities Administrators Association shows that senior citizens make an estimated 44 percent of all investor-related complaints, up from 28 percent in 2005. The same study also revealed that variable and equity index annuities were involved in 48 percent of cases of senior financial exploitation reported to state securities regulators.
Unscrupulous financial advisors sometimes have legitimate-sounding titles, such as “Certified Senior Advisor.” The article told related how a 76 year-old widow, with a meager fixed income, and a house with a small mortgage that she had hoped to leave her children was conned by a nice-sounding “Certified Senior Advisor,” who sent her pictures of his family and gained her trust. He then advised her to obtain a reverse mortgage to purchase a risky, long term investment product with sever penalties for early withdrawal (probably a variable annuity). The advisor made a big commission and the senior received an investment she did not need and could not get out of without incurring a severe penalty.
While seniors and others who experienced financial abuse often feel duped and ashamed, they should not. One of the main points of the article is that anyone who has suffered financial abuse, including, but not limited to, senior citizens, should resist the normal reaction to “blame themselves” and seek all available legal remedies instead. After all, just as it is advisable to trust your doctor, and not try to heal yourself, you should be able to trust someone who claims and appears to be an expert, such as a “Certified Senior Advisor.”
Many states, including California and Georgia, among others, have special senior financial protection statutes that make it a crime to commit elder financial abuse. Generally, an elder is anyone 65 year of age or older. In addition to those statutes, the laws of every state provide financial compensation for elders who have suffered financial abuse.
Not only are those who hold themselves out as financial advisors legally liable for their wrongdoing, so are the brokerage firms and other companies that sent them out to do business and allowed them to take advantage of senior citizens. Courts and arbitration panels take a dim view of companies and individuals that prey on senior citizens, and are generally inclined to punish the wrongdoer and compensate the victim in a meritorious case.
Page Perry Senior Partner J. Boyd Page said, “Senior investment fraud is a serious ongoing problem that is growing year by year. Senior citizens who believe they have been taken advantage of should act promptly to contact a law firm with experience in representing aggrieved investors.”
Page Perry is an Atlanta-based law firm with over 125 years collective experience representing investors in securities related litigation and arbitration. While past results are not indicative of future success, Page Perry’s attorneys have recovered over $1,000,000 for clients on more than 30 occasions. Page Perry has successfully represented investors against brokers and their firms for causes of action based on elder abuse. For further information, please contact us.