SEC Targets Investment Scams Aimed at Seniors |
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March 26, 2006 –The Securities and Exchange Commission, which has had its share of dust-ups with state regulators in recent years, has launched a nationwide program to work with local regulators to combat what it sees as a rising wave of fraudulent investment scams being pitched to older Americans.
SEC Chairman Christopher Cox, in a speech Friday to the Consumer Federation of America, said that with baby boomers turning 60, protecting seniors from investment scams was an issue of mounting concern." The impending retirement of the baby boomers will mean that very soon, the vast majority of our nation's net worth will be in the hands of the newly retired," he said. "Scam artists will swarm like locusts over this increasingly vulnerable group." Cox said that the SEC's regional offices would work closely with state and local law enforcement, sharing intelligence to identify which individuals or groups might be "preying" on seniors. Such efforts are already underway in California and Florida, Cox said, with a special emphasis on investment seminars that entice attendees with the promise of a free meal. In recent years, more and more of these so-called free lunch seminars have been exposed as high-pressure sales pitches designed to get older Americans to put their assets into unsuitable investment programs, including some types of annuities. "The SEC's experience thus far tells us that these sales pitches are anything but 'free,' " Cox said. "They come at a very high cost." The SEC's growing interest in the subject is good news, says Patricia Struck, head of the North American Securities Administrators Association." This is an area that will remain one of the hottest topics for the next several decades," says Struck, who also is Wisconsin Securities administrator. "You can't possibly have too many cops on the beat here." Reflecting that concern, the Senate Committee on Aging plans to hold hearings on the matter this week.
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