Senior Investors

Swindlers of Seniors Targeted by Massachusetts’ Head Securities Regulator

Published on: May 16, 2007 | by Shepherd Smith Edwards & Kantas, LLP

William F. Galvin, Head of the Massachusetts Securities Division, declared war against deceptive financial advisers who prey on senior citizens.

Massachusetts became the first state in the nation to adopt regulations governing brokers or advisers who use credentials or professional designations suggesting expertise in advising senior citizens on financial matters.

Effective June 1, the new regulations state that only credentials accredited by a nationally recognized accreditation agency – also approved by the Secretary of the Commonwealth – may be used when offering seniors financial advice.

When Asked the Fate of $134 million of Investors’ Funds Ex-professor Claims “Amnesia.”

Published on: May 14, 2007 | by Shepherd Smith Edwards & Kantas, LLP

After $134 million was found missing from the funds he managed, a flamboyant former professor is now claiming amnesia after being charged with lying to federal investigators. The U.S. Attorney’s office in Charleston, South Carolina, said Al Parish, 49, made false statements and provided false documents to the Securities and Exchange Commission. The former Charleston Southern University professor then surrendered to FBI agents.

Last week, the SEC reported that Parish had been charged with civil fraud, saying he provided false statements to over 300 investors indicating that the five funds he managed were trading profitably. The SEC said that after it tried to contact Parish, “he checked into a local hospital claiming to have amnesia.”

While his attorney said Parish had remained in the area since the civil case began and would not flee, prosecutors argued that Parish is a flight risk because of the large amount of missing funds involved in the case and should therefore be held without bail. The judge agreed ordering Parish to be held without bail. If convicted, Parish faces up to five years in prison and a $250,000 fine.

Study by NASD Foundation Looks At Why Elderly Are Vulnerable To Investment Fraud

Published on: April 26, 2007 | by Shepherd Smith Edwards & Kantas, LLP

A study released by the NASD Investor Education Foundation, in cooperation with AARP Foundation and WISE Senior Services, looks at why certain senior investors are more likely to become victims of investment fraud. The report is called “Off the Hook Again: Understanding Why the Elderly Are Victimized by Economic Fraud Crimes.”

Among the key findings:

*Investment fraud victims tend to be more financially literate than non-victims.

SEC Commissioner Says Simplified Disclosure Document Will Help Retirees Make Investment Decisions

Published on: April 18, 2007 | by Shepherd Smith Edwards & Kantas, LLP

Roel Campos, the Securities and Exchange Commissioner says that he is working on a campaign to create a simplified, prospectus-like disclosure document that would give investors clear, concise information about the performance and cost of their retirement plan assets.

Campos said it was a “given” that retirees would be on their own when managing their retirement funds because Corporate America was continuing to move away from defined benefit funds. Because of this, Campos said that retirees needed to obtain performance information so they could effectively manage their accounts. In order to do a good job managing their own investment funds, however, retirees need information about costs they are paying based on their investment decisions.

The retirement plans are subject to ERISA, and because of this, the SEC will be working with the Labor Department, which is in charge of administering the 1974 Employee Retirement Income Security Act, to implement the commission’s initiative.

New Regulations, Filed By The Massachusetts Securities Division, Define Credentials Standards For Advisors To Senior Investors

Published on: March 22, 2007 | by Shepherd Smith Edwards & Kantas, LLP

William Francis Galvin, the Massachusetts Secretary of the Commonwealth, says that his office has set up new standards for advisers using credentials implying that they are experts when it comes to senior investors.

According to Galvin, the state of Massachusetts is charging two Massachusetts annuity salesmen with using unethical and dishonest practices when marketing annuities to seniors: Michael Mark Delmonico and John Christopher Huck.

Delmonico is accused of presenting himself as an unbiased and objective financial advisor to seniors, but allegedly was actually trying to sell high-commission annuities that were often not suitable for senior investors. He has denied the charges. Also charged in the complaint was Workman Securities Corp. and company officials Robert Vollbrecht and Paul Maxa for failing to properly supervise Delmonico.

NASD Warns Seniors About Selling Life Insurance Policies For Cash

Published on: February 14, 2007 | by Shepherd Smith Edwards & Kantas, LLP

The NASD has issued an Investor Alert warning senior citizens regarding the risks that come with selling their life insurance policies for “senior settlements” or “life settlements”- transactions that are paid in cash.

In its alert, the NASD says that while life insurance policies can be liquidated for cash, the costs that come with receiving a life settlement can be high, while negatively affecting a person’s finances. In addition, it is not easy to know whether or not a person is getting a fair rate for his or her policy. Factors to consider when thinking about whether or not to sell a life insurance policy include evaluating transaction costs, the financial effect of the sale, and the price to be received for the settlement. The NASD warns that it doesn’t have jurisdiction over all life settlements-only those connected to variable policies. It therefore cannot deal with any complaints involving other kinds of life settlements.

What Is a Life Settlement and How Does It Work?