Investment Fraud Lawyer Blog

At 78 million strong, baby boomers have always been a targeted demographic. Dubbed by the Social Security Administration as a “silver tsunami,” the baby boomers are an attractive opportunity for the financial services industry.

The financial services industry launched advertising campaigns geared towards boomers early. Many such firms have counted on the baby boomers to fuel growth in new products, from target-date mutual funds to investment funds that buy retirement businesses to expanded offerings form leisure industries. The experts, however, were wrong. For at least the next 25 years, as reported in the May 22, 2008 issue of Business Week, the retirement market will be much smaller than the often-cited 78 million. In fact, the growth rate will be less than four percent annually or may even be zero.

Continue reading "Retiring Baby Boomers: Fewer Than Expected" »

Posted by Page Perry, LLC | Permalink | Email This Post

Posted In: Common Securities Broker Abuses , Early Retirement Scams , Elder Abuses , Market Developments

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According to opinion columnist David McPherson writing on ABCnews.go.com, certain unscrupulous financial advisers pitch a scenario to employees of major corporations. The pitch is quite attractive: You can retire early (while in your 50's), cash out your retirement plan, and live off 12 percent annual returns.

These brokers use unrealistic investments projections to convince prospects that they can retire comfortably when they are in their 50's. The brokers earn fees and commissions on millions of dollars simply by convincing employees to collect a single lump-sum payment in lieu of guaranteed monthly pension benefits.

In April, the Financial Industry Regulatory Authority (FINRA) launched an effort to warn employers and employees of early retirement schemes that “promise more they can deliver." Over the last two years, FINRA has disciplined two brokerage firms – Securities America Inc., and Citigroup Capital Markets Inc. – that had targeted employees of Exxon and BellSouth with similar schemes.

Continue reading "FINRA: Beware Early Retirement Scams" »

Posted by Page Perry, LLC | Permalink | Email This Post

Posted In: Common Securities Broker Abuses , Early Retirement Scams , Elder Abuses , Regulatory Developments , Smart Investing Tools

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Investors who are approaching retirement are often targeted by brokers and invited to free investment seminars. In some cases, the broker encourages investors to take one or more of the following actions:

• Retire earlier than they might otherwise have done;
• Opt out of the company's retirement plan or 401(k) plan and take a lump-sum payment;
• Open a traditional IRS at the broker's firm;
• Invest in variable annuities, equity-based annuities, Class B mutual funds, and exchange traded funds that are substantially riskier than the fixed benefit pension they gave up.

These recommendations are often coupled with the broker's false promises that the investor can receive higher monthly retirement income and can grow the investment with little or no risk. As a result of this bad advice, many individuals have lost their entire "next egg." Page Perry has found that, in many cases, the client's financial professional misled them about their investments by locking them into excessive withdrawal rates and exposing their portfolios to huge risk without adequate disclosure. Even worse, most retirees do not understand that they were misled or that they may have legal rights to recover the losses that they sustained.

Posted by Page Perry, LLC | Permalink | Email This Post

Posted In: Early Retirement Scams

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Federal and state regulators are investigating a widespread practice of brokers targeting seniors at “free lunch” seminars.  Regulators warn that such seminars are among the top investment scams for 2007.  Seniors and persons who may or may not be contemplating retirement are lured by complimentary meals, often at upscale hotels, restaurants, golf courses and retirement communities, and promised “educational” information with no sales pitches.  All too often, however, the brokers use the occasion to pitch unsuitable investments and retirement strategies, including cashing in their pensions, reinvesting the proceeds, retiring early, and living on the substitute paycheck from their investments that never materializes.

This is “a problem that can have absolutely devastating consequences for a large proportion of our population,” said Mary Shapiro, Chief Executive Officer of the Financial Industry Regulatory Authority (FINRA), and Chairman of the FINRA Investor Education Foundation, in an interview.

Continue reading "Fraudulent 'Free Lunch' Seminars Target Seniors" »

Posted by Page Perry, LLC | Permalink | Email This Post

Posted In: Common Securities Broker Abuses , Early Retirement Scams , Elder Abuses , Variable Annuities and Equity-Indexed Annuities

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Most retired investors trust and rely on a financial professional to manage their retirement assets. Many people do not know that, because of this trust relationship, financial professionals owe their customers a fiduciary duty to act in their best interest and to recommend investments that are appropriate for their investment needs. If financial professionals breach their fiduciary obligations by giving inappropriate financial advice, they and their firm may be held liable to their customers for the damages caused by the bad advice.

In recent years, many telephone company retirees have elected to take the lump sum payout option over the traditional pension. Many retirees elected the lump sum option based on the advice of trusted financial professionals who recommended the lump sum because it purportedly would provide the retiree with higher monthly retirement income and the opportunity to grow the investment with little or no risk. In truth, in many cases, the financial professional improperly recommended the lump sum option solely because it was the only way that his or her firm could gain control of the retirement assets and generate commissions.

Continue reading "Attention AT&T, Verizon, Bell Atlantic, BellSouth Employees and Retirees: Telephone Company Employees Are Targets For Unscrupulous Brokers" »

Posted by Page Perry, LLC | Permalink | Email This Post

Posted In: Common Securities Broker Abuses , Early Retirement Scams

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