The SEC National Exam Program concentrates on monitoring risks specific to elderly and retiring investors, at a time when it is needed most
Here’s the good news: in United States, people are living longer. As a result of this trend, the aging population in the U.S. is becoming more and more dependent upon their own investments for retirement income than ever before.
The bad news: This dependency upon retirement investments opens the door for fraudulent financial firms and advisers to take advantage of the elderly when managing their funds, an activity known as elder financial fraud.
Enter the Securities and Exchange Commission (SEC) Office of Compliance Inspections and Examinations (OCIE) and its detailed focus on identifying industry practices and financial advisers that appear to have elevated risk profiles for malfeasance.
What does this mean for you as an investor?
It means that if you are an elderly investor or have a loved one whom is elderly and dependent upon income from investments handled with a brokerage firm or individual financial adviser, the SEC is taking a closer look at the institution and/or broker on your behalf.
How will the SEC look out for elderly investors?
The SEC will focus on these three significant areas of elder financial fraud risk:
In 2015, the SEC’s OCIE announced the multi-year Retirement-Targeted Industry Reviews and Examinations (ReTIRE) Initiative in which it examines advisers and broker/dealers (B/Ds) for how they deliver products and services to retail investors who invest in retirement vehicles.
The OCIE ReTIRE staff uses data analytics, information from prior examinations, and examiner-driven due diligence to identify registrants to be reviewed. It focuses on the activities of the investment adviser representatives and registered representatives as needed—not just on their firms.
As such, in 2017, the ReTIRE Initiative examinations will likely focus on, among other things, registrants’ recommendations and sales of variable insurance products as well as the sales and management of target date funds. It will also assess controls surrounding cross-transactions, particularly with respect to fixed income securities.
Public Pension Advisers
Additionally, the OCIE will examine investment advisers to pension plans of states, municipalities, and other government entities that hold “a large amount of U.S. investors’ retirement assets.” In particular, the office “will examine investment advisers to these entities to assess how they are managing conflicts of interest and fulfilling their fiduciary duty,” as well as reviewing “other risks specific to these advisers, including pay-to-play and undisclosed gifts and entertainment practices.”
In its exam program, the OCIE will evaluate “how firms manage their interactions with senior investors, including their ability to identify financial exploitation of seniors. Examinations will likely focus on registrants’ supervisory programs and controls relating to products and services directed at senior investors.”
If you or someone you love has fallen victim a broker or financial advisor taking advantage of an elderly investor, it is important to know you have rights. Through securities arbitration, you may be able to recover monetary losses due to broker or firm behavior.
The attorneys at Silver Law Group are leaders in the field of securities arbitration. We represent individual and institutional investors across the United States who have lost money at the hands of a trusted financial advisor. Scott Silver is currently the chairman of the American Trial Lawyers Association, Securities and Financial Fraud Group and routinely represents investors in securities arbitration claims.
If you lost money as the result of actions that violate SEC or FINRA regulations, we may be able to help you recover it. Our law firm only works on contingency, so you won’t owe us anything unless you get money back. Fill out our contact form to obtain a free consultation from an experienced arbitration lawyer.