FINRA Senior Hotline Warns: Fraud is Alive and Well and Takes Many Forms

Attorney Advising Disclaimer

The FINRA Securities Helpline for Seniors program, founded in April 2015, produced its first year-end report, in which the helpline described the unique concerns and threats facing senior investors who call into the hotline. For instance, the helpline's average caller is 70 years old and, in the Western United States, the three states that produced the most phone calls in 2015 were California, Arizona, and Texas.

Though the content of each call varies, FINRA found that "one message coming in loud and clear from hotline calls is that fraud is alive and well, and takes many forms."

Among the lessons learned from the inaugural Helpline for Seniors report, FINRA advises investors to diversify their portfolios, especially as relates to the risk of over-concentration of interest-rate sensitive bond investments and similar securities.

The report also advises investors to determine whether a recommended investment is right for the individual who will be investing, based on that person's financial goals, timeline, and risk tolerance. The issue of sales practice abuse and unsuitable recommendations appeared in FINRA's report, as did the similar concerns of fraud or illegal activity involving brokerage accounts and investments, as well as abuse and exploitation of seniors and individuals with diminished ability to navigate complex financial systems, including conservative investors who may be unsophisticated or unfamiliar with the securities industry.

FINRA described one such case and how one client used the helpline to bring down an unscrupulous broker. According to the "Fast Action" case study, an 86-year-old client's accountant called the Helpline for Seniors after finding a "suspicious document" in the elderly client's tax receipts. Upon investigation, FINRA discovered that the senior client's broker had improperly borrowed $220,000 from the client and was repaying her with $1,200 monthly installments. As a result of the investigation, FINRA ended up barring the broker.

If you have invested with a broker or financial adviser whose unsuitable recommendations, sales practice abuses or fraudulent exploitation or deceptions have proven harmful to your investments or interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.

Investor Highlight: Lessons for All Investors from FINRA's Senior Hotline (FINRA)

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