Elderly individuals often rely on the advice and assistance of financial professionals to grow and maintain their assets. Unfortunately, retirement funds, savings, and investments that seniors spend their entire life building can disappear or diminish at the hands of someone they trust most.
If a financial professional has caused you or someone you know to suffer financial loss, an experienced elder financial abuse attorney can help.
The Law Offices of Robert Wayne Pearce, P.A. has extensive experience helping seniors who have been taken advantage of by their financial advisors, stockbrokers, and other professionals. We’ve helped recover over $175 million for our clients over the last 45 years.
If you or someone you know has been the victim of elder financial abuse, our experienced attorneys can help. We offer a free consultation to evaluate your case and provide legal advice tailored to your individual needs.
You can either call our office at (800) 732-2889 or contact us online to schedule an appointment. Our friendly staff is here to help you get the justice and compensation you deserve.
Investment Losses? We Can Help
Discuss your legal options with an attorney at The Law Offices of Robert Wayne Pearce, P.A.
or, give us a ring at (800) 732-2889.
What is Elder Financial Abuse?
Elder financial abuse occurs when someone uses, or attempts to use, an elderly person’s financial resources for their own personal benefit. Anyone in a position of trust can take advantage of an elderly person. This includes attorneys, financial advisors, trustees, caretakers, and family members.
Florida heavily penalizes those who financially exploit elderly persons. Under Florida law, exploitation of an elderly person occurs when a trusted individual or person in a business relationship with the elderly person knowingly obtains or uses (or attempts to use) an elderly person’s funds, assets, or property with the intent to deprive the elderly person of those resources.
Elder financial abuse can carry both civil and criminal liability for the perpetrator.
Who Qualifies as an Elder?
The threshold age of an elder varies by state. Florida law defines an “elderly person” as anyone “60 years of age or older who is suffering from the infirmities of aging.”
Common Types of Elder Financial Abuse
Elder financial abuse comes in many forms, such as theft, fraud, misuse of authority, extortion, and manipulation. Cases of financial abuse are evident across all industries, for example:
- Health and life insurance scams;
- Predatory lending, where lenders deceive borrowers into agreeing to unfair loan terms;
- Fraudulent home repairs or maintenance;
- Credit card scams; and
- Illegitimate charitable donations.
Professionals in the financial services industry are in an advantageous position to manipulate and exploit because they already have access to a portion of the elder’s funds. If you or someone you love has experienced any of the types of elder financial abuse described below, contact the investment fraud attorneys at The Law Offices of Robert Wayne Pearce, P.A., for help recovering your losses.
Below are some of the most common types of elder financial abuse:
Investment Fraud
Elders can suffer financial loss through fraudulent investment schemes that their financial advisors suggest. Elderly investors are targets for investment fraud because perpetrators believe they are unsophisticated investors and easy to manipulate. Examples of investment fraud are:
- Purchasing unregistered securities,
- “High return” or “risk free” investments,
- Complex investments,
- Ponzi schemes, and
- Pyramid schemes.
If your financial advisor suggests an investment that seems too good to be true, then it probably is.
Breach of Fiduciary Duty
Registered financial advisors have a fiduciary duty to make investment decisions in their clients’ best interests. This is the highest standard of care and imposes both legal and ethical obligations on the advisor. The fiduciary duty encompasses the duty of loyalty, the duty of care, and the duty of good faith and fair dealing.
A breach of fiduciary duty occurs when:
- A fiduciary duty exists, through the creation a fiduciary relationship;
- The fiduciary acts contrary to the clients’ best interests, either through deliberate acts or failure to act;
- The client suffers actual financial loss; and
- The fiduciary’s breach was the direct causation of the client’s losses.
Florida law recognizes breach of fiduciary duty as a form of exploitation of an elder. There are several ways a fiduciary can breach their duty.
Misrepresentation or failure to disclose
As part of their fiduciary duties, financial advisors are required to disclose all material information about an investment to their clients. Misrepresenting or failing to disclose relevant information that would have affected the client’s investment decision is a breach of fiduciary duty.
Unsuitable investments
When an investor creates an account at an investment advisory firm, the client will typically complete an account opening form that includes important information about the client, such as investment objectives, risk tolerance, net worth, occupation, and income. The advisor is under a fiduciary duty to make investment recommendations that suit the client’s needs. Failure to do this is a breach of fiduciary duty. For example, if a client retires and the advisor fails to adjust the client’s portfolio investments, the advisor could be liable for financial losses.
Negligence
Negligence occurs when the advisor’s conduct falls below the industry’s established standard of care, which is designed to protect investors from an unreasonable risk of harm. An example of negligence is when the advisor fails to diversify the investor’s portfolio by over-concentration in one type of security or sector. This carries a great deal of risk to the investor because a fluctuation in that single security or sector could result in significant losses.
Those who can show a breach of fiduciary duty may recover actual damages, such as money or assets lost, or gains not realized due to their financial advisor’s mismanagement. Often, the advisor or investment firm will also pay punitive damages to the investor as a form of punishment for their inappropriate actions.
Unauthorized trading is the buying, selling, or exchanging of securities without the authority, knowledge, or permission of the investor. Unless the financial advisor is given discretion to trade in a client’s account, trading without consent is a type of investment fraud.
Investors do not have to agree to every trade their advisor recommends. It is the advisor’s responsibility to ensure that the client fully understands the benefits and risks of the recommended trade. On the other hand, it is the investor’s responsibility to review account statements and trade confirmations. Elderly investors often place a great deal of trust in their financial advisor to make investment decisions for them, which creates the perfect opportunity for elder financial abuse.
Account Churning
Account churning is when a financial advisor makes a large number of trades in the client’s account for the sole purpose of collecting more commissions. With each trade, the investor is losing money, while the advisor is making money. This excessive trading is a way to financially exploit an investor.
Have You Been a Victim of Elder Financial Abuse? Here’s What to Do.
Financially exploiting the elderly is detrimental in many ways. It can cause great economic loss not only for the individual and their family, but also businesses and government programs. For example, when seniors do not have the financial resources for proper medical care, they rely on federal healthcare programs, such as Medicaid.
According to a 2019 study conducted by the U.S. Consumer Financial Protection Bureau, elderly Americans who were exploited suffered an average loss of $34,200. In cases where a fiduciary caused the loss, the amount increased to $83,600 per victim. Unfortunately, elder financial abuse often goes unreported, so these numbers are likely higher.
Below is 4 steps you can take if you are a victim of elder financial abuse:
Step 1. Take Back Control – Talk to an Elder Financial Abuse Attorney
You should contact an attorney as soon as you believe you or someone you love has been the victim of financial exploitation.
An experienced elder financial abuse attorney will carefully review what occured between you and the trusted individual to help determine what recourse you may have. Do not wait until you are in a position where your financial resources are depleted.
The Law Offices of Robert Wayne Pearce, P.A. has recovered over $175 million dollars on behalf of investors who have been the victims of fraud or misconduct by financial advisors, stockbrokers and other trusted individuals. We understand that this type of exploitation can be extremely traumatic, particularly when it involves a trusted individual.
Our attorneys provide knowledgeable advice and representation in these difficult cases. We have successfully represented many elderly clients who had their trust violated, and are dedicated to helping protect seniors against financial exploitation.
If you or someone you know has been the victim of elder financial abuse, contact our office today for a free consultation. We will help ensure that your best interests are being represented and provide the most effective legal options to pursue justice.
Step 2. Report the Incident
As soon as you suspect elder financial abuse, report the incident to the financial advisor or the brokerage firm’s compliance department. If the issue is unresolved, your next option may be mediation or arbitration.
Step 3. Pursue a FINRA Mediation or Arbitration
The Financial Industry Regulatory Authority (FINRA) is the governing organization that creates and enforces rules for advisors and their firms and assists in resolving disputes between advisors and investors. If your financial advisor or their firm is registered with the U.S. Securities and Exchange Commission (SEC) or a state securities regulator, you can use FINRA’s dispute resolution services to resolve your case of elder financial abuse.
Mediation is a voluntary, non-binding dispute resolution method that uses a neutral third party to assist in reaching a mutually agreeable solution. This option is faster and less expensive than arbitration or litigation.
Arbitration is more like litigation in that an impartial party or panel hears arguments from both sides, analyzes the facts and evidence, and makes a final, binding decision. There is a statute of limitations to bring a claim against your financial advisor. Under FINRA Rule 12206, you have six years from the time of the financial advisor’s act to take action. However, Florida has a four-year statute of limitation for negligence claims. Therefore, it is paramount to the success of your case that you contact an experienced elder financial abuse attorney as soon as you suspect financial abuse.
Step 4. File a Lawsuit
Your final option is to sue the trusted individual for their financial abuse. Litigating these cases is complex, lengthy, and costly, but may be necessary to recover your financial losses. Speak with an elder financial abuse attorney to learn which option is best for you.
Schedule Your Free Consultation with an Elder Financial Abuse Attorney
Elder financial abuse is devastating emotionally and financially. Let us help you on your road to recovery.
We will fight to hold the wrongdoers accountable and provide options on how to recover your financial losses. Our seasoned elder financial abuse attorneys know the legal protections you have, and we are dedicated to representing your interests.
Over the past 45 years, we have recovered over $175 million for investors who were wronged by those they trusted. Let us help you today. Contact The Law Offices of Robert Wayne Pearce, P.A., to schedule a free consultation with our elder financial abuse attorneys.