Elder Fraud

FINRA Adopts Amendment to Rule That Would Provide Trusted Contact for Seniors with Diminished Capacities

June 6, 2017 | Silver Law Group

FINRA recently amended a rule that would require brokerage firms to establish a contact for at-risk seniors.

In March 2017, FINRA amended FINRA Rule 4512 to require member firms to make reasonable efforts to obtain the name and contact information for a trusted contact person upon the opening of a customer’s account.

The proposal to amend the rule was initially pitched in late October 2016 and has gone through the comment phase up until FINRA adopted and the SEC approved it.

FINRA and SEC Adopt New Rule to Help Curb Elder Financial Fraud

June 6, 2017 | Silver Law Group

FINRA and the SEC adopted and approved a new rule that is intended to help curb elder financial fraud.

In March 2017, FINRA adopted FINRA Rule 2165. Financial Exploitation of Specified Adults. Shortly thereafter, the SEC approved the rule with an effective date of February 2018 set in place.

FINRA Rule 2165 allows a FINRA member firm that reasonably believes financial exploitation may be occurring or has occurred to place a temporary hold of up to fifteen (15) business days on the disbursement of funds or securities from the account of a “Specified Adult” customer. A Specified Adult is either (a) a person aged 65 or older; or (b) a person, aged 18 or older, who the firm reasonably believes has a mental or physical impairment that renders the individual unable to protect his or her own interest.

SEC Halts Chicago-based Fraud Targeting Seniors Involving Daniel H. Glick, Formerly of Transamerica Financial Advisors

June 6, 2017 | Silver Law Group

The SEC announced an emergency asset freeze and temporary restraining order against a Chicago-based investment adviser and his financial management company accused of scamming elderly investors out of millions of dollars.

In the SEC’s complaint, the SEC alleges that Daniel H. Glick (CRD# 2175655) and his unregistered investment advisory firm Financial Management Strategies (“FMS”) took advantage of seniors who entrusted him with millions of dollars’ worth of their retirement savings.

According to the SEC complaint, Glick and his companies raised over $6 million from elderly investors, with most of the money coming from two families. Glick first raised money though Glick & Associates until dissolution in 2014, then through Glick Accounting Services and FMS.

FINRA Bars Former Kovack Broker For Allegedly Naming Himself as Inheritor of 91-year-old Customer’s Condo

May 25, 2017 | Silver Law Group

FINRA has barred Fort Lauderdale, Florida-based broker Douglas W. Studer (CRD# 4440047) for refusing to testify on the record in a FINRA-led investigation into whether Studer violated his employing firm’s policy by being named in an elderly customer’s estate documents to inherit the customer’s waterfront condominium.

Studer was employed by Kovack Securities Inc. (CRD# 44848) until Kovack terminated him in July 2016, according to the Acceptance, Waiver and Consent (“AWC”) entered into between Studer and FINRA.

According to the AWC, FINRA began investigating Studer on August 2, 2016. Studer was asked to record testimony, but he refused to appear. Allegedly, Studer appeared on his 91-year-old customer’s estate documents and was to inherit the elderly customer’s waterfront condominium.

What is the Senior Safe Act?

May 24, 2017 | Silver Law Group

Find out how the proposed law would help protect the elderly

Elder financial fraud in the U.S. has now reached an epidemic level. According to an estimate from the Government Accountability Office (GAO), seniors are scammed out of almost $3 billion every year. Fortunately, plans are in the works to help stop this growing problem.

Earlier this year, Senators Susan Collins and Claire McCaskill introduced the Senior Safe Act. This bipartisan legislation aims to protect older people from financial exploitation and fraud. If passed, support would be given to regulators and financial institutions to educate employees about identifying and preventing abuse.

FINRA’s Securities Helpline for Seniors

April 7, 2017 | Silver Law Group

In April 2015, the Financial Industry Regulatory (FINRA) established the toll-free, FINRA Securities Helpline for Seniors. In the short amount of time of its existence, the helpline and the awareness it has brought to FINRA member firms has produced fruitful results.

According to a wealthmanagement.com report, $1.25 million in reimbursements have gone back to customers since the inception of the helpline. The helpline has received over 4,000 in-bound calls, according to the report.

According to the report, these phone calls can range from being strictly educational and used to learn about different FINRA functions or investment products to ones where FINRA discovers fraud.

Is FINRA’s Senior Helpline Working to Combat Elder Financial Fraud?

September 5, 2016 | Silver Law Group

Is FINRA’s Senior Helpline Working to Combat Elder Financial Fraud? on silverlaw.com

FINRA recognizes that our seniors are especially vulnerable to financial fraud—is HELPS helping?

In 2015, FINRA launched a new program called HELPS, a hotline for senior investors with questions about the legitimacy of their investments. The program is intended to help combat elder financial fraud, which is rampant across the US, but especially prevalent in South Florida, which is already a hotbed of national and international fraud.

Senior investors are especially vulnerable because of health and memory problems like Alzheimer’s and dementia as well as a lack of education about the changing financial environment and new investment products. To make the matter worse, unethical brokers may particularly target seniors in order to take advantage of their vulnerabilities, aiming to convincing them to purchase risky and expensive investments, and, on occasion, attempting to directly steal their funds.

FINRA Panel Orders Morgan Stanley to Pay $34 million for Exploiting an Elderly Florida Man

April 13, 2016 | Silver Law Group

The Financial Industry Regulatory Authority (the “FINRA”) awarded more than $34 million on March 18, 2016 to the estate of former Home Shopping Network chief Roy M. Speer in its claim against Morgan Stanley for churning the late Mr. Speer’s account.

The all-public arbitration panel ruled that Morgan Stanley, broker Ami Forte and branch manager Terry McCoy were jointly liable for violating Florida elder exploitation laws, unauthorized trading, breach of fiduciary duty/constructive fraud, negligence, negligent supervision and unjust enrichment.

The panel awarded $32.8 million in compensatory damages to Lynnda Speer, Mr. Speer’s widow and representative of the estate, and $1.5 million to reimburse costs incurred during the arbitration process. Additionally, Ms. Speer will seek to recover potentially millions in attorney’s fees in Florida court, according to an InvestmentNews article.

Glenn Moffitt Barred By FINRA For Alleged Elder Fraud

February 12, 2016 | Silver Law Group

Glenn Moffitt Barred By FINRA For Alleged Elder Fraud on silverlaw.com

Nevada financial broker permanently barred from all FINRA activity after taking advantage of elderly clients

Henderson, NV broker Glenn Moffitt was permanently barred from all FINRA activity for allegedly misappropriating funds from elderly clients between 2011-2014. According to his FINRA report, Moffitt is accused of misappropriating at least $370,000 and failing to cooperate with the FINRA investigation into these charges. Moffitt was registered with First Allied Securities Inc. of Las Vegas, NV during this time period.

The elderly victim alleges that Moffitt misappropriated more than a total of $400,000 from multiple accounts. This client also reports that Moffitt admitted the wrongdoing but did not repay the funds as promised. He allegedly pressured the client and steered them toward investments that were high risk and not in line with the client’s goals.

Philip Grasso Jr. Barred by FINRA Due to Allegations of Elder Fraud

October 16, 2015 | Silver Law Group

Broker misconduct results in “substantial harm’ to elderly customers

Philip Leonard Grasso Jr.’s 18-year career in the securities industry is now over due to allegations of elder fraud, where he purportedly misused funds, willfully misrepresented material facts and failed to complete on-the-record testimony requested by FINRA.

According to the FINRA Disciplinary Action, Philip Grasso has been permanently barred from association with any FINRA member in any capacity as of May 2015. There are three causes of action included in the findings.