SEC FINDS FRAUD AT INVESTMENT SEMINARS FOR SENIORS
A new study by the Securities and Exchange Commission (SEC) finds that "free lunch" seminars may in fact mislead seniors into making unwise investments. The findings come in the wake of an SEC complaint against several individuals and companies in an alleged scheme to defraud thousands of seniors of their retirement funds.
As part of an effort to protect senior investors, the SEC investigated seminars in which financial services firms offer seniors a free lunch in exchange for listening to investment advice. According to the SEC, 23 percent of the seminars involved possibly unsuitable advice and 13 percent appeared to be fraudulent. While the seminars are advertised as providing financial planning advice, the report found that 100% of the seminars were actually sales pitches, half of which featured exaggerated or misleading advertising claims.
The report was released as part of the SEC's second annual Seniors Summit to combat investment fraud and abusive sales practices against older U.S. investors. Free-lunch sales seminars are routinely targeted at senior citizens and are commonly held at hotels, restaurants, retirement communities, and golf courses. The report found that many seniors were encouraged to attend the seminars with misleading claims like "Immediately add $100,000 to your net worth." According to the report, inappropriate sales pitches included recommending risky investments to conservative individuals and suggesting illiquid investments to investors who needed cash.
The report recommends that financial firms supervise sales seminars more closely. It also recommends that ongoing senior investment education efforts include education about "free lunch" sales seminars.
-From: “SEC Finds Fraud At Investment Seminars For Seniors”, ElderLaw Answers. Last updated: 9/28/2007. Retrieved from: http://www.elderlawanswers.com/resources/article.asp?id=6484§ion=4&state
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