Legislation introduced in the House and Senate yesterday would enact harsher penalties against people who commit securities violations against senior citizens. Under the proposed Senior Investor Protections Enhancement Act, each infringement targeted toward an investor age 62 or older would carry an extra $50,000 civil fine in additional to the normal penalties. Violations could include selling products unsuitable for the older investor’s age, failing to disclose fees, charging large penalty fees, or giving the customer a different investment product than the one that was marketed.
“Certain unscrupulous financial advisers have already taken enough from hardworking Americans. It is despicable to think of them preying on our seniors by selling them investment products they don’t need, charging them large penalty fees, or otherwise taking advantage of them,” says Congresswoman Gwen Moore, a Wisconsin democrat who cosponsored the bill in the house. “These two pieces of legislation will help ensure that only legitimate financial advisers are selling products to seniors and will punish those who take advantage of them.”
A second bill, the Senior Investor Protection Act, creates a grant program for states to encourage state regulators to adopt a uniform standard for the accreditation of financial advisers and educate seniors about various financial adviser credentials. States could use the funds to hire additional staff to investigate and prosecute senior investor fraud cases, fund new technology, equipment, and training for regulators, prosecutors, and law enforcement, and to provide educational materials about various financial adviser designations.
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“Seniors should be able to trust the people who invest their money,” says Senator Herb Kohl, a Wisconsin democrat and chairman of the Special Committee on Aging. “They should not be worried that the title after their advisor’s name is scarcely more than a marketing ploy, and that it was not earned through sufficiently rigorous financial education or training.”
Tell us, would these 2 bills help protect senior citizen inventors from fraud?