On behalf of Mihalek Law posted in Securities Law on Friday, January 16, 2015.
People of all ages and from all backgrounds could find that their broker is stealing from them. That said, certain demographics may be more vulnerable than others. One of those groups is elderly investors. In fact, as the baby boomer generation ages, instances of fraud are growing. According to the North American Securities Administrators Association, enforcement actions involving victims who are seniors is at 34 percent.
Recognizing this as an issue, the NASAA recently formed a committee to look at elder fraud cases. More specifically, the committee will focus on addressing the issues faced by regulators and securities industry professionals, as well as investors who are seniors.
A recent case provides an example of what one of these cases might look like.
FINRA determined a broker in another state took a total of $88,850 from an elderly client. The money, which was taken over the course of 20 months via 36 blank signed checks, was deposited into his own account. The checks were made out for various amounts, ranging between $800 and $5,000. When necessary to cover the checks, the man would transfer money from a savings account the woman had, into her checking account.
Though the broker in this instance had been provided access to the elderly woman’s checks to pay certain expenses, he did not have permission to make withdrawals from his client’s bank account in this manner.
As a result of the man’s action he was fired from his job. In addition, following an investigation conducted by the Office of Fraud Detection and Market Intelligence and the Department of Enforcement, FINRA permanently barred the broker from working in the securities industry.
Fortunately for the woman, the misappropriated money was reimbursed by one of the banks for which the broker worked. Hopefully fewer of these incidents will occur in the future as a result of the NASAA committee.
Source: Think Advisor, “FINRA Bars Ex-Broker for Stealing From Elderly Customer,” Emily Zulz, Dec. 22, 2015