Securities Fraud, Stockbroker Misconduct, & Investment Fraud Blog
The securities fraud attorneys at the law firm of Meyer Wilson frequently post relevant content regarding a range of investment fraud topics. Our lawyers are licensed in Ohio and California, and we represent investors across the country in securities arbitration and litigation claims.
SEC Shuts Down California Man and Alleges Day Trading Scheme Targeted Seniors
On May 5, the SEC obtained an emergency order to halt an alleged securities fraud scheme that the commission said was being perpetrated by Robert C. Butler.Category: Elder Abuse
Hidden Fees Make Equity-Indexed Annuities Bad Investment for Seniors
Equity-indexed annuities are extremely popular right now. And, with purported returns of up to 8 percent and a zero chance of loss on the principal, it’s easy to see why. Due to catastrophic losses in the stock market over the last few years, many investors are opting for “safer” bets, and annuities seem to fit the bill. Unfortunately, for some investors, the products don’t merit the hype.
Take 82 year-old Helen Siswein, for example. In January, she highlighted her experience with equity-indexed annuities for InvestmentNews. According to the Jan. 30 article, in 2003, Siswein put $1 million into four different equity-indexed annuities on the advice of an insurance agent who came to her home (“Popular indexed annuities called 'terrible ideas' for seniors,” InvestmentNews, Jan. 30, 2011).
While the agent made sure to tell her about the potential 8 percent return with no chance of a loss, she wasn’t told that her money had to stay in the annuities for a long period of time – 12 years in one case – unless she didn’t mind paying high surrender fees of 10 to 15 percent. Siswein was 75 in 2003. When she went to withdraw her funds in 2008, at age 80, the high fees to cancel her contract resulted in an annual return of about 3 percent. (In contrast, the index the annuity tracked had returns of 6.3 percent.)
In the article, InvestmentNews quoted Kent Smetters, a professor of insurance at The Wharton School of the University of Pennsylvania and a former economic policy official at the Treasury Department. Smetters explained that equity-indexed annuities are extremely complex and usually include “really high hidden fees.”
“That's why they're terrible ideas for older people, even though they're peddled to them,” Smetters said.
As reported in the article, insurers sold $8.7 billion of indexed annuities in a single quarter in 2010. Commissions for sales reps can be as much as 12 percent, which usually isn’t disclosed to investors. With such high incentives, it’s clear why representatives like to push the products, even to seniors for whom the products really aren’t suitable.
The indexed annuities contracts are “one of the most abusively sold products on the market today,” Barbara Roper, director of investor protection for the Consumer Federation of America, told InvestmentNews.
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Category: Elder Abuse
Labels: Broker misconduct elder abuse
Sassman sentenced to 18 Years in Prison, $4.5 Million in Restitution
Ponzi schemes are common forms of financial fraud, costing investors billions of dollars in losses each year. Read this article to learn about a recent Ponzi scheme trial in California, involving defendant William Sassman. While on our website, order your FREE copy of renowned securities and investment fraud attorney David P. Meyer’s book, Five Signs of Investment Fraud and What to Do If It’s Happened to You.
Category: Elder Abuse
Illinois Investment Advisor Barred From Industry For Stealing From Clients
Steve W. Salutric was barred from the securities industry via an administrative proceeding Order on September 10, 2010 for allegedly stealing $1.8 million from at least 17 investors over the past three years, according to a Dow Jones Newswire. Salutric was a registered investment advisor with Results One Financial LLC in Elmhurst, Illinois.Category: Elder Abuse
FINRA Arbitration Panel Hammers Discount Broker with Treble Damages in Elder Abuse Award
A recent Financial Industry Regulatory Authority (FINRA) arbitration award in favor of a 96 year-old investor included treble damages for elder abuse. Under California’s elder abuse statute, plaintiffs may recover triple their actual damages if there has been “financial abuse.”Category: Elder Abuse
