Elder Financial Abuse
Senior citizens are particularly vulnerable to instances of securities fraud. Under most state laws, including California, victims of elder financial abuse may be able to recover treble punitive damages and legal fees if money or property was stolen or wrongfully taken from them. Elder financial abuse is often committed by family members or caregivers but can also include banks, stockbrokers or other financial professionals that directly or indirectly assist someone in financially abusing an elder.
Anyone who suspects that a senior citizen is the victim of financial abuse should report it to the police or local adult protective services agency. Financial institutions are usually the first line of defense for detecting and preventing financial elder abuse. They are required by law in most states, including California, to report financial elder abuse whenever there is a reasonable suspicion that financial abuse has been committed upon an elderly person.
Some warning signs that a stockbroker or other financial professional may be committing (or assisting in) financial abuse of an elder include:
- The stockbroker develops a close relationship with the elderly person, a family member or caregiver.
- The elderly person has given trading authorization or discretion over their account to the broker, a family member or caregiver.
- The elderly person's brokerage account is being churned or excessively traded creating large commissions for the broker.
- The elderly person is being asked to invest in risky investments such as private placements, start-up companies, promissory notes or hedge funds.
- There have been unusual withdrawals, credit card activity or loans in the elderly person's account.
- The elderly person has written checks directly to the broker.