Preying on Seniors

“Seniors” account for 44 percent of all investor complaints received by state securities regulators and that number could grow in coming years, according to the North American Securities Administrators Association

“Seniors” account for 44 percent of all investor complaints received by state securities regulators and that number could grow in coming years, according to the North American Securities Administrators Association (NASAA).

Meanwhile, about one-third of all enforcement actions taken by state securities regulators involve senior investment fraud. In some states these rates are even higher. In Florida, for example, seniors make up an estimated 75 percent of all investor complaints, while in North Carolina close to 50 percent of all enforcement actions involved seniors. NASAA also found that unregistered securities, variable annuities and equity-indexed annuities are the financial products most frequently involved in investment fraud aimed at seniors.

“Variable and equity-indexed annuities are legitimate and suitable investments for some, but we believe these products are unsuitable for many retirees and are being aggressively pitched to seniors through investment seminars nationwide,” said Patricia Struck, Wisconsin Securities Administrator and president of NASAA, at a recent “Seniors Summit” hosted by the SEC. Cases involving variable or equity-indexed annuities represented an estimated 65 percent of caseload in Massachusetts and 60 percent of caseload in Hawaii and Mississippi, according to NASAA. The survey's preliminary findings were based on responses from 34 of NASAA's 67 member jurisdictions in the U.S., Canada and Mexico.

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