ATTORNEY NEWSLETTER
SEC Penalizes Firm $500,000
Alleged Lack Of Supervision And Compliance Failures
Broker Stole From 98 And 86-Year-Old Clients
Investment firms have a responsibility for supervising brokers and advisors for securities law compliance and also for potential financial elder abuse of older clients. A recent fine imposed by the U.S. Securities and Exchange Commission (SEC) order, discussed below, illustrates ways in which investment firms may fail to police the abusive conduct of their employees. Evans Law Firm, Inc. represents senior victims of financial elder abuse in the San Francisco Bay Area and throughout California, and pursue all remedies including double damages and payment of attorneys’ fees and costs for having to bring suit to get the injured party’s money back. Cal. Probate Code § 859 (double damages); Cal. Welf. & Inst. Code § 15657.5 (mandatory attorneys’ fees and expenses in financial elder abuse cases). Outright theft, unauthorized trading, and sales of unregistered investments or other fraudulent investments may also constitute violations of other State and federal laws. See, e.g., Cal. Corp. Code § 25400 et seq.; Securities Act of 1933, 15 U.S.C. §§ 77a et seq., and Rule 10b-5 under the Securities and Exchange Act of 1934, codified at 17 C.F.R. § 240.10b-5. If you or a loved one is a victim of financial elder abuse by a broker, advisor or other party in the San Francisco Bay Area or elsewhere in California, call our lawyers today at (415)441-8669. Our toll-free number is 1-888-50EVANS (888-503-8267).
$500,000 Fine On Investment Firm[1]
The SEC recently announced that a large investment firmas has agreed to pay a civil penalty of $500,000 for failing to supervise a former broker who stole more than $920,000 from two elderly clients, including a now-deceased 98-year-old World War II veteran. As part of the SEC order, the firm also was censured and cited for its poor communication within its supervisory and compliance rank regarding investigating potential external threats of financial exploitation of seniors. The employee/broker previously plead guilty to charges of financial elder abuse, securities and wire fraud and embezzlement and has been sentenced to five years in prison for his offenses. According to the SEC, the broker misappropriated $901,500 from an Individual Retirement Account (IRA) of a 98-year-old retired airline pilot and World War II veteran. The SEC said the broker forged wire transfer authorization letters and diverted the customer’s funds to his personal bank account. According to the SEC, he also stole $22,400 from the account of an 86-year-old woman who lived in a memory-care facility. The branch manager of the firm became concerned about the broker’s suspicious activity and reported his concerns to an internal compliance council. The SEC determined, however, that the compliance unit took insufficient action to stop the broker from continuing his activities and severing him from the firm. The SEC found that the broker continued to steal from the 98-year-old and started stealing from another86-year-old client even after the referral to the compliance unit was made.
Reviewing Older Loved One’s Accounts
If you are a family member of an older loved one the best way to protect them from the kind of fraud described in the reported case is to stay involved in their lives and financial affairs and constantly monitor all bank and investment accounts. Trace where their funds are being invested and carefully review statements to see if they have been doctored or otherwise appear suspicious Keep hard copies of all bank and investment firm records. You may need them as banks only keep records for seven years. Closely examine all bills that are being paid directly from any account to make sure they are your loved one’s bills and not the bills of someone else who has given the account information to their own creditors for bill payments. Accompany any older loved one to any business meetings so that they are not sold an unsuitable investment or insurance product or coaxed into signing blank forms or checks under the pressure of a broker or agent.
Contact Us
Ingrid M. Evans represents victims of financial elder abuse by brokers, accountants, bookkeepers, financial advisors, insurance agents, retirement planners, investment promoters, caregivers, trustees, or other person in the San Francisco Bay Area or elsewhere in California contact at (415) 441-8669, or by email at <a href=”mailto:info@evanslaw.com”>info@evanslaw.com</a>. Our toll-free number is 1-888-50EVANS (888-503-8267).
[1] Evans Law Firm, Inc. is not involved in the case in any way.
