Senior investors lose millions of dollars each year to investment fraud committed by some bad brokers who line their own pockets by bilking people out of their retirement money. With the growing number of retired seniors in the United States, the financial exploitation of elderly adults is escalating. The story of former broker Roger Hudspeth is just one example of how FINRA, the SEC and securities litigation attorneys are cracking down on unscrupulous brokers who target senior investors.
Senior Investment Fraud
Virginia financial adviser Roger Hudspeth recently pleaded guilty to an investment fraud scheme that cost senior investors close to $6 million. He was accused of selling unregistered securities to senior investors and misrepresenting high-risk securities to steer people who were often in or nearing retirement toward fraudulent investment offerings. According to reports from the U.S. Attorney’s Office, Hudsppeth spent over $700,000 in investment funds for personal purchases including a new Range Rover.
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Hudspeth, along with other associates of Dominion Investment Advisors, regularly held seminars on ways to maximize social security for senior investors. During these seminars, investors were guaranteed high returns on their investments, but never told about the highly speculative and risky nature of the securities. Hudspeth and his associates intentionally misrepresented the facts and omitted important information to sell fraudulent securities to their clients.
As a result of Hudspeth’s illegal actions, his licenses were revoked, Dominion Investment Advisors was permanently closed, and Hudspeth was prohibited from taking part in future investment advisory activities. The U.S. Attorney’s office filed federal charges for investment fraud against Hudspeth, and he faces up to 15 years in prison.
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According to the North American Securities Administrators Association, senior investment fraud accounts for 50 percent of all complaints received by state regulators. Unfortunately, many seniors are given false or misleading information by unscrupulous brokers who are aiming to increase their own profits.
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FINRA and the SEC do not endorse professional titles such as “retirement advisor” or “senior specialist” that some financial professionals use to market themselves. To prevent abusive or unscrupulous sales practices or fraudulent activities that target seniors, it is recommended that seniors use caution when investing with brokers who use titles that include such terms. Additionally, FINRA requires brokerage firms to take the age and risk tolerance of senior investors into account before making investment recommendations.
Unethical brokers often use fraudulent investment schemes to put investors’ retirement funds in their own pockets for personal gain.
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Recovering Losses Caused by Investment Misconduct.