Elder Financial Abuse: A growing Wall Street problem

January 4, 2010

In my law practice, I've noticed an increase during the past several months in the number of calls seeking my help on behalf of defrauded senior citizens.  Typically, the caller is a family member: son, daughter, niece, or nephew.  They often tell the story of some charming stockbroker who visits their grandmother or grandfather and brings them muffins, changes light bulbs, and picks up the monthly brokerage statements that the client was told to hold -- unopened -- for the broker (who then takes them home for review).  Although the senior citizen victim believes that all is fine, the worried family member soon discovers missing dollars, missing securities, and an unavailable or evasive stockbroker.  By the time things get sorted out, it is often too late. And through it all, the elderly victim insists that the broker is a sweetheart, a lovely young girl or boy:

It's just a misunderstanding and I don't want to cause him any trouble -- he called me last week, and he literally cried to me that his job and home were on the line because of this confusion about my account statement.  I didn't understand the whole thing but it turns out that there is something called a back-office, and the problem is simply some record keeping that's done there. 
I have nothing to worry about. He promised me that. My money and stocks are simply caught up in this back-office thing.  When it's all straightened out, he says that I'll be very happy with the profits.  My stockbroker is such a lovely young boy and he is doing everything possible to get this worked out for me.  So, please, don't start anything with his firm or those government people. 

If your mom or dad or grandmother or grandfather is telling you a similar story -- get involved.  Immediately contact your state securities division or consult with a private lawyer skilled in such matters. One thing for certain, we're likely to see a landslide of new elder cases in a few months when folks start preparing their tax returns.  Usually, that's when someone begins to notice the discrepancy between what the statements say and what the senior citizen client represents is their understanding.

I've started to keep track of some cases involving fraud against the elderly.  You can monitor the growing docket at

In a case only just-reported in December 2009, we learn of a registered person,Vincent John Miller (FINRA AWC/2008012562901/December 2009) , who made a recommendation to an elderly customer that the customer invest in shares of a real estate investment trust (REIT). The customer withdrew funds from existing investments and gave Miller over $1 million to purchase REIT shares. However, Miller only invested a portion of the customer's funds in REIT shares and misappropriated $433,543.22 of the funds by depositing the checks into his personal bank account for his personal use, including gambling, mortgage payments, credit card bills and other personal expenses. Miller failed to respond to FINRA requests for information and was barred pursuant to a settlement agreement.

In another recent settlement, William Alson Johnson (FINRA AWC/2007010251302/November 2009), opened a joint account for an elderly customer and Johnson's acquaintance.  This joint account was funded entirely by the elderly customer's assets. Johnson's acquaintance, who served as the customer's caretaker, withdrew over $14 million from the joint account. Johnson made false statements while under oath during his on-the-record (OTR) testimony about his awareness of expensive gifts the caretaker had given to his sales assistant, and attempted to convince his sales assistant to make false statements during her testimony. Johnson was barred pursuant to a settlement agreement.