States and SEC Join Forces to Step Up Efforts to Protect Elderly Investors
Last Monday, the U. S. Securities and Exchange Commission filed an emergency enforcement action to halt an ongoing fraudulent offering of stock in a company called One Wall Street, Inc. in which the defendants have obtained over $1.6 million from at least 64 investors, most of them senior citizens.

The SEC's complaint charges the defendants with making fraudulent solicitations and misappropriating investor funds. According to the SEC complaint, rather than apply the proceeds collected from the investors towards legitimate business expenses, investors funds were used and continued to be used to pay personal expenses, including jewelry purchases, gambling and "adult entertainment" services, and payments for child day care, car loans and mortgages.

Mark K. Schonfeld, Director of the SEC's Northeast Regional Office, stated, "This case emphasizes our continuing commitment to protecting elderly investors. Here, we are seeking emergency relief to halt the fraud and preserve investors' funds."

The SEC, along with the States and the National Association of Securities Dealers (NASD), have recently embarked upon a joint endeavor to protect seniors from predatory sales tactics and investment fraud.

For example, in a test case of the partnership, regulators in Florida are working with the SEC and NASD to investigate "free lunch" seminars, where seniors can be pressured to invest in scams. California's Seniors Against Investment Fraud, an education program, has been adopted by Florida, Iowa and Pennsylvania and is being touted as a model in other states.

Last month, the SEC held its first-ever Seniors Summit, where the SEC joined with state regulators and others to examine how to best protect older Americans from investment fraud. Among the topics they addressed were a recent study on elderly victims of fraudulent practices, coordination among government agencies and the private sector to both educate seniors and monitor potential fraudulent activities, and potential regulations to curb abusive financial practices.

Among the participants was Patricia Struck, president of the North American Securities Administration Association, Inc., who presented the panel with a statistical overview that showed that individuals age 60 and over -- who make up 15 percent of the population -- are 30 percent of the nation's fraud victims. She said that nearly half of all investor complaints are from seniors and a third of enforcement actions by securities regulators are against senior fraud.

Nearly one-third of all U.S. investors are between age 50 and 64, and about 5 million senior citizens are victims of financial abuse each year, SEC figures show.