ATTORNEY NEWSLETTER
Ponzi Schemes Increasingly Target Older Investors
After years of savings and with the children educated and on their own, seniors should take comfort in a nest egg for future years. But unscrupulous brokers, insurance agents and stock promoters target seniors for just the same reason – there’s money sitting there. Increasingly, we see stories of Ponzi schemes and other orchestrated fraud luring senior investors. In a Ponzi scheme, fraudsters use money they collect from new investors to pay existing investors. What appears to be a return on your investment is actually money from another investor who has been swindled. The California securities fraud and financial elder abuse attorneys at Evans Law Firm, Inc. can represent you if you lose money in a Ponzi scheme or as the result of annuity fraud, insider trading, securities misrepresentations or nondisclosures, accounting fraud or any other type of securities fraud or financial elder abuse here in California. If you have, call our lawyers today at (415)441-8669.
Before investing in any new venture, check for classic warning signs of a Ponzi scheme:
- Promises of High Returns with Little or No Risk. Guaranteed high investment returns are the hallmark of a Ponzi scheme. Every investment has risk, and the potential for high returns usually comes with high risk. If it sounds too good to be true, it probably is.
- Unlicensed and Unregistered Sellers. Most Ponzi schemes involve individuals or firms that are not licensed or registered. Even if an investment professional comes across as likeable or trustworthy, use the free search tool on Investor.gov to check whether the person is licensed and registered. Also do a broker check at brokercheck.finra org.
- Overly Consistent Returns. Investment values tend to fluctuate over time. Be skeptical of an investment that generates steady positive returns regardless of market conditions. That was one of the hallmarks of Bernie’s Madoff’s huge Ponzi scheme.
Recent SEC Emergency Action
The U.S. Securities and Exchange Commission (SEC) recently filed an emergency action to shut down one Ponzi scheme targeting older investors and allegedly bilking 55 investors, mostly seniors, of approximately $6 million.[1] According to the SEC complaint, two individuals and two companies allegedly solicited investors by falsely representing that their proprietary options trading strategies were highly profitable. In reality, as alleged in the complaint, the defendants invested less than half of investor funds and those investments resulted in near-total losses. The complaint alleges that the defendants misappropriated the remaining funds by using them to repay other investors and by transferring approximately $880,000 of investor funds to themselves and their spouses for personal use. According to the SEC’s complaint, the defendants sent false reports to investors to conceal their fraudulent conduct and give the investors the false impression they were generating positive returns. “The SEC’s emergency action is intended to protect prospective investors from future harm by halting what we allege is a brazen ongoing fraud that targeted many senior citizens and small business owners,” said Carolyn M. Welshhans, Associate Director in the SEC’s Division of Enforcement. “Among other things, this emergency relief prohibits the defendants from soliciting new investors, freezes their assets, and orders them to provide a sworn accounting of their assets.”
Contact Us
If you or a loved one has been the victim of a Ponzi scheme or other form of financial elder abuse by an insurance agent, stock broker, investment advisor, promoter or other person here in California contact Ingrid M. Evans and the other California financial elder abuse attorneys at Evans Law Firm at (415) 441-8669, or by email at <a href=”mailto:info@evanslaw.com”>info@evanslaw.com</a>. Our attorneys also have experience with complex financial contracts and large insurance companies. We can help guide your case through filing a complaint, investigation and discovery through trial or an equitable settlement. We also handle cases involving physical and financial elder abuse, nursing home abuse, whole life insurance and universal life insurance, and indexed, variable, and fixed annuities.
[1] Evans Law Firm, Inc. is not involved in the reported case in any way.
