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Bill Introduced to Protect Seniors From Investment Fraud
Spectrum Staff
WASHINGTON,
D.C. — U.S. Senators Bob Casey, D-Pa., a member of the Senate
Special Committee on Aging, and Herb Kohl, D-Wis., Chairman of the
Senate Special Committee on Aging, recently introduced a bill to
help protect seniors from investment fraud. The Senior Investor Protections
Enhancement Act would increase penalties for those who commit securities
violations against people who are at least 62 years old.
“Everyday, older Americans are targeted for investment scams, and they
see their life savings go down the drain,” said Senator Casey. “This
legislation will help better protect our older citizens from being targets of
fraud.”
“Many seniors are discovering that their life savings may not be enough
to last them throughout their retirement. As they turn to investments to bridge
the gap, seniors need to know that they can trust the people who handle their
money,” said Senator Kohl.
“This bill will ramp up the punishment for those who take advantage of
older Americans’ well-earned retirement savings,” he said.
Americans over the age of 65 control an estimated $15 trillion in assets, a large
portion of which has investment potential. Seniors have difficult and complicated
decisions to make on how to stretch their savings throughout their retirement.
Their assets remain at risk from traditional fraud and Ponzi schemes.
Seniors are increasingly offered many new but complicated investment tools such
as reverse mortgages and various annuity products. While these products can be
very valuable to seniors specifically, they can also be abused by unscrupulous
actors.
Additionally, many older Americans are targeted by con artists seeking to exploit
them through manipulation and fraud. Seniors already account for more than half
of all investor complaints received by state securities regulators.
The U.S. Securities and Exchange Commission (SEC) has reported that it is working
to improve its ability to prevent fraud and abuse where possible and prosecute
it where necessary.
Under the Senior Investor Protections Enhancement Act, penalties for existing
securities violations could include an additional $50,000 civil fine for each
violation that is primarily directed toward, specifically targets or is committed
against a senior. Under the legislation, seniors are defined as persons age 62
or older, the age at which most retirement savings become available for use and
investment.
The bill would increase penalties for those who commit securities violations
against seniors — violations could include selling them products that are
unsuitable for their age, failing to disclose fees, lockups of cash or large
penalty charges, switching investments sold with the one marketed or other material
aspects of the investment. The bill would not interfere with legitimate investment
advisors who recommend products and investments appropriate for their customers.
Last September, the Aging Committee held a hearing to examine some of the questionable
practices used by so-called senior financial investment specialists in order
to gain access to the retirement savings of older Americans.
An investigation conducted by the Committee revealed that many seniors targeted
by such unscrupulous salesmen have lost their life savings because they were
steered toward investment instruments that were unsuitable for them, given their
retirement needs and life expectancy.
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Metropolitan News Company, Inc.
