Regulator Warns Brokerage Firms About Misleading Seniors


Concerns have developed that certain stock brokerage firms have misused “senior” designations in a manner that is misleading to investors. In fact, the Financial Industry Regulatory Authority Inc. (FINRA ) is warning Wall Street brokerage firms about the use of special “senior” designations when marketing investments products.

In Regulatory Notice 11-52 FINRA indicated that “it is publishing this Notice to remind firms of their supervisory obligations regarding the use of certifications and designations that imply expertise, certification, training or specialty in advising senior investors (senior designations).” The notice indicated that more than two-thirds of surveyed broker-dealers allow registered representatives to use “senior” designations.

As reported in InvestmentNews, FINRA’s survey of 157 firms “indicated that some supervisory procedures were not particularly discerning regarding the quality of the designations.” FINRA indicated “In certain instances, senior designations approved by firms or widely used by registered persons did not require rigorous qualification standards.”

Regulators have long been concerned about the use of senior designations and the widespread marketing of products to elderly investors via “free lunch” seminars.
In 2008, the North American Securities Administrators Association Inc. passed a model state law that prohibits the use of senior designations issued by organizations that are primarily engaged in sales or marketing and do not have certain standards in place. A number of states subsequently implemented the law.

According to Pratt H. Davis, an attorney at the securities arbitration and litigation law firm, Page Perry, “seniors are now more than ever the target of financial scams or unsuitable investments. Investors who have been placed in questionable securities as a result of advisors who market themselves as specializing in “senior” or elderly clients need to contact legal counsel to make sure they have been advised of all of their legal rights.”

Page Perry is an Atlanta-based law firm with over 170 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 $1.5 billion for investors. Page Perry’s attorneys are actively involved in representing isenior citizens in securities cases. For further information, please contact us.