ALABAMA SECURITIES COMMISSION
770 WASHINGTON AVE, SUITE 570
MONTGOMERY, ALABAMA 36130-4700
Telephone: (334) 242-2984 or 1-800-222-1253. Fax: (334) 242-0240
Email: asc@asc.state.al.us. Website: www.asc.state.al.us
FOR
IMMEDIATE RELEASE
State Securities Cops Warn Seniors to be
on the Lookout for Investment Fraud
Joseph P. Borg, Director,
Alabama Securities Commission alerted senior investors to the dangers of
investment fraud and urged seniors to take control of their financial health. “I’m deeply concerned that a perfect storm for investment fraud is
brewing and Alabama seniors are most at risk,” said Borg.
Borg said the collapse of the bubble
economy, coupled with interest rates at 45-year-lows, and rising costs for
medical insurance, prescription drugs and basic living expenses, have brought
con artists from the side streets and back alleys to Main Street where older
investors live. “These are dangerous times for seniors, our most financially
vulnerable citizens. They need education, they need protection,” Borg
said.
State securities regulators say older investors are
being targeted with increasingly complex investment scams involving
unregistered securities, promissory notes, charitable gift annuities, viatical
settlements, and Ponzi schemes all promising inflated returns.
“Behind these schemes are opportunists who know that
seniors and others living on fixed incomes are being squeezed in the current
financial environment,” Borg said. “Their products and pitches sound tempting
to many seniors who’ve seen their retirement accounts dwindle in recent years –
and who don’t have the benefit of time to recoup their losses.”
In Delaware, for example, a widow sold her house to
purchase a promissory note offering 10 to 50 percent annual returns in response
to an ad in a publication entitled “Better Years.” The unregistered investment turned out to be fraudulent and the
78-year-old woman now lives with her son and works as a convenientce
store clerk to make ends meet.
Borg said, “Recently the Commission has been very
concerned because a number of senior citizens in Alabama have considered moving
some very solvent pension plan funds into high risk investments such as options
or initial public offerings (IPO’s).
Also, some senior citizens are transferring their whole pensions to
callable CDs and locking into a situation where they can’t get to their money
for 10-15 years. The Commission has
information for seniors to learn about different investment products and solid
investing principles such as diversification before they make an investment
decision.”
Borg urged seniors not to be ashamed to admit that they have been victims of investment fraud. “Silence will only help the con artists lead another victim into the trap. Every day that
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financial fraud goes unreported is another day that
criminals can steal retirement savings from unsuspecting seniors,” Borg
said.
“Common sense tells you that if something sounds too
good to be true it almost always is. But you don’t have to rely on common sense
alone,” Borg said. Senior investors can contact their state securities
regulator with any questions about an investment. Seniors also can learn more
about the dangers of investment fraud by visiting the online Senior Investor
Resource
Center
at (www.nasaa.org), a site developed specifically for senior audiences and
offers a variety of important information and resources.
The Senior Investor Resource Center offers: A
checklist of questions seniors can ask before making an investment decision;
common sense solutions to protect your nest egg from investment fraud;
information about the top frauds targeting seniors; contact information for
securities regulators in each state, the District of Columbia, Canada, Mexico
and Puerto Rico; an Investors Bill of Rights; an investor fraud awareness quiz
and links to a variety of investor education publications and programs offered
by state securities regulators and others to help seniors fight investment
fraud.
“It
is never too late to learn,” Borg said and offered the following tips to help
seniors protect their retirement assets.
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investment fraud or abuse. Con artists know that you might hesitate to report
that you have been victimized in financial schemes out of embarrassment or
fear. Con artists prey on your sensitivities and, in fact, count on these fears
preventing or delaying the point at which authorities are notified of a scam.
Every day that you delay reporting fraud is one more day that the con artist is
spending your money and finding new victims.
For more information contact the
Alabama Securities Commission:
ALABAMA SECURITIES COMMISSION
770 WASHINGTON AVE, SUITE 570
MONTGOMERY, ALABAMA 36130-4700
Telephone: (334) 242-2984 or 1-800-222-1253. Fax: (334) 242-0240
Email: asc@asc.state.al.us. Website: www.asc.state.al.us
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If you have questions or require more information contact:
Daniel G. Lord
Education and Public Affairs Manager