Jason Wade Cox, a former advisor for Edward Jones, was sentenced to five years in prison after pleading guilty to charges of mail fraud, wire fraud, and money laundering involving the account of a 56-year-old disabled woman. Cox had been managing the account of Jodene Beaver ever since the death of her father three years ago.
Beaver, who has mental and physical impairments, was left a trust by her father, who chose Cox as her financial adviser. Unfortunately, rather than helping Beaver, Cox stole thousands of dollars, taking money from the original account, moving the funds into her checking account, and then spending a lot of the cash on gambling. Not only did Cox spend all of Beaver’s money, but also he recommended that she sell her condominium and transfer to an apartment that had bed bugs.
According to the Internal Revenue Service, Cox got around federal banking rules by taking out from Beaver’s account just under the amount that would have required him to file currency transaction reports. When bank officials asked Beaver about the money she was withdrawing for the financial adviser, she replied that they were business partners but wasn’t sure what kind of business they were involved in. Her bank closed her accounts and notified the police.
In addition to the prison sentence, Cox must serve three years supervised release and pay over $412,000 in restitution.
Unfortunately, there are financial advisers and others who will not hesitate to take advantage of an older investor or a mentally or a physically impaired one. Our elder financial fraud lawyers At Shepherd Smith Edwards and Kantas, LTD LLP are here to help investors recoup their losses.
This week, the Financial Industry Regulatory Authority put out Regulatory Notice 15-37 asking for comment on its proposed rules tackling the problem of financial exploitation involving vulnerable adults and senior citizens. The regulator wants firms to do what they reasonably can to get the contact information of a trusted person for the accounts of these customers. It also wants firms to be able to put a temporary hold on monies or securities when there are signs that financial exploitation may be happening.
In April, FINRA launched its Securities Helpline for Seniors. In just the last several months, the line has gotten about 1900 calls.
The North American Securities Administrators Association is also seeking to protect vulnerable adults from exploitation. Last month it released for comment An Act to Protect Vulnerable Adults From Financial Exploitation. The act would require investment advisers and brokers to tell Adult Protect Services and the securities regulator if they suspect that a vulnerable adult is being financially exploited.
An elderly or other vulnerable adult that is the victim of fraud or theft may lose the resources he/she needs to live. Many retired seniors cannot go back to work and it can be devastating to lose their retirement money and not be able to support themselves for the rest of their lives.
Financial adviser sentenced to 5 years for bilking disabled woman out of inheritance, The Columbus Dispatch, October 16, 2015
FINRA Solicits Comment on Proposed Rules Addressing Financial Exploitation of Seniors, FINRA, October 15, 2015
FINRA Securities Helpline for Seniors – HELPS™
NASAA Board Approves Release for Comment of Proposed Model Act to Protect Vulnerable Adults from Financial Exploitation, NASAA, September 29, 2015