Key Findings from NASAA’s Enforcement Report: Senior Investors at Risk

By Patricia Uceda, Fall 2014 Graduate Research Assistant

seniorIn its 2014 report of its survey of 2013 nationwide enforcement data, NASAA found senior investors are more susceptible to investment fraud than younger investors, reinforcing their and the SEC’s earlier announcement of the need for new initiatives focusing on senior investor issues.

Specifically, the survey showed that in 2013 there were 1,463 state enforcement actions which tracked the victims by age, and of those 1,463 actions, 311 involved abuse of senior citizens. NASAA believes that this figure was conservative and that the actual number of cases involving senior abuse was undoubtedly greater.

The most common types of senior abuse involved unregistered securities in the form of promissory notes, private offerings, or investment contacts. NASAA found that these cases accounted for more than half of all senior-related enforcement actions and outnumbered the reported cases involving traditional securities by more than four to one. In addition, affinity fraud remains another very common type of senior abuse, as well as variable annuities or life settlement products.

Fortunately the SEC and the NASAA have both taken action to focus on senior investor issues and prevent the financial exploitation of seniors. You can read more about their efforts here and here.