Senior News from March, 2006
SEC Targets Senior Fraud
The U.S. Securities and Exchange Commission (SEC) has made fighting fraud aimed at seniors a top priority, as the senior citizen population continues to grow and control an increasing share of the nation’s wealth. According to the top U.S. securities regulator, senior citizens are being pressured into risky investments through shady sales pitches, incomprehensible documents, and even free lunches. SEC regional offices plan to work tightly with law enforcement agencies, as well as broker watchdog NASD and other regulators in one of the first joint efforts in this field. “If we find that… seniors are being exposed to… high-pressure sales tactics, wild claims about projected returns, and no disclosure of actual risks of the investment – we’ll move in hard and fast,” said Christopher Cox, SEC Chairman.
In a recent case, SEC investigators uncovered a Los Angeles scam in which seniors were lured to investment seminars with the promise of a free lunch, only to be pressured into buying $150 million in bogus bonds. The Commission intends to pursue more of these cases, and prosecute any scam artists that prey on the trust of seniors. Cox also said that the SEC would crack down on corporations that use incomprehensible technical jargon to hide bad news or misdeeds.
For more information, visit the Securities and Exchange Commission.
Former Con Man Warns of Investment Scams
At a hearing in the U.S. Senate in March, reformed con man Barry Minkow testified that increasingly, seniors are being bilked into investment scams. As a teenager, Minkow started a company in his family’s garage. He claimed to restore water- and fire-damaged buildings, but took potential investors on tours of abandoned buildings that, in reality, had no connection to his company. As a result, Minkow was convicted of 57 counts of securities, credit card, and mail fraud in a scheme that prosecutors said cost victims more than $100 million. “People will stop at nothing… to defraud,” Minkow testified. His advice to seniors was, “Don’t invest out of fear or greed.”
For more information, visit the U.S. Senate Special Committee on Aging.