Answer:  If you are a professional who helps families plan for or deal with ANY of their elder care matters, then you owe it to yourself to be listed on America's #1 online source for "Elder Care Experts"….

ElderCareMatters.com

ElderCareMatters.com is where you will find more than 2,000 competent, caring elder care experts located across America, including:

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So if you are a competent, caring elder care professional who helps families with ANY of their elder care matters, then request today an Application for Membership in the national ElderCare Matters Alliance and get listed on ElderCareMatters.com - America's #1 source for "Elder Care Experts" plus information and answers about a wide range of elder care matters.

Phillip G. Sanders, MBA, MSHA, CPA
Founder & CEO
ElderCare Matters, LLC
ElderCareMatters.com

 

 

 

Answer:  Elder financial abuse is any practice or conduct that misuses, takes or conceals a vulnerable elder’s funds, property or assets. Elder financial abuse includes any type of investment fraud that uses misrepresentation, deception, trickery, false pretence, or dishonest act to the financial detriment of a senior.

A fiduciary duty is an affirmation obligation imposed on one person to act in the best interest of another person.  Whether or not a fiduciary duty is owed to an elderly client depends on the law of the state where the senior resides. In some states like Georgia, stockbrokers owe fiduciary obligations to their clients but insurance agents and bank officials normally do not. Nonetheless, this does not give an insurance agent or bank official a license to defraud a senior out of his or her money or property and the agent or official can still be sued by the senior for fraud.

Let me know if I can be of further assistance to you.

J. Michael Bishop, JD
Smiley Bishop & Porter, LLP
Atlanta, GA  30338
770-829-3850
Member of the national ElderCare Matters Alliance

Answer:  The practice you are referring to is commonly known in the securities industry as “unauthorized trading.” It violates securities laws and securities industry rules. Unauthorized trading occurs when a broker makes trades in a customer’s account without having any authority, either in writing or orally, to do so. Unless a client gives a formal written grant of "discretion" (like a limited power of attorney) to her broker, a stockbroker is not entitled to trade in the client's account without obtaining prior approval for the specific trade.

In your Aunt’s circumstance, if she has given you a financial power of attorney to act on her behalf, you should immediately notify the brokerage firm’s manager in writing that no new transactions should be executed in the account because of her condition.  Even in the absence of a financial power of attorney, you should notify the manager in writing that your Aunt is suffering from Alzheimer’s.  Either way, this will put the brokerage firm on notice it has potential liability and the broker’s conduct will be more closely scrutinized.

If the transactions in your Aunt’s account have not been authorized, she has a right to recover losses she has sustained on the unauthorized purchases and I would suggest you contact a securities lawyer to advise you further. If the broker’s manager wants to meet with you to discuss your Aunt’s account, keep in mind this is akin to the insurance adjuster trying to get a statement from a car accident victim before the victim can talk with a lawyer. If the broker has engaged in authorized trading someone knowledgeable should do a complete account review to be sure nothing else improper has transpired in the account.

Let me know if I can be of further assistance to you.

J. Michael Bishop, JD
Smiley Bishop & Porter, LLP
Atlanta, GA  30338
770-829-3850
Member of the national ElderCare Matters Alliance

Answer:  A Ponzi scheme is a phony investment plan where investors are promised high rates of returns on their investment but no real legitimate business operations exist to generate profits or earnings. Instead, early investors are paid from funds put into the scheme by later investors. When the promoter of the scheme can no longer attract new investor money to pay early investors (or he has stolen investor funds to fund his own lifestyle) the scheme collapses.

Ponzi schemes derive their name from criminal financier Charles Ponzi who is credited with creating this fraud back in the 1920s.  Charles Ponzi duped thousands of investors through a postage stamp speculation scheme. Ponzi promised to pay investors a 50% return on their investments within 90 days. Ponzi had no legitimate business or investment opportunity in place to generate earnings and used incoming funds from new investors to pay off earlier investors.  

Some warning signs associated with Ponzi schemes are:

•  Promises of unrealistically high returns with little risk.
• Claims by the promoter that the investment opportunity is extremely complex and usually only available to large overseas institutional investors like foreign banks and insurance companies.
• Requirement by the promoter that investors not discuss the investment with third parties and keep all aspects of the investment confidential.
• Representations by the promoter that investor funds are never at risk and are always held in an escrow account.
• Lack of transparency/refusal of the promoter to disclose to investors the location of investor funds or how the funds have been invested.
• Opportunity to reinvest promised payments at increasingly higher rates of return.
• Inability to pay investors requested withdrawals or refusal to allow investors to cash out their investments.

Let me know if I can be of further assistance to you.

J. Michael Bishop, JD
Smiley Bishop & Porter, LLP
Atlanta, GA  30338
770-829-3850
Member of the national ElderCare Matters Alliance

Answer:  A securities brokerage firm and its brokers have a duty to only recommend investments which are suitable for a customer in light of the customer’s objectives and individual circumstances. This is known as the “suitability doctrine.” Specifically, the Financial Industry Regulatory Authority (“FINRA”) rules state:

"In recommending to a customer the purchase, sale or exchange of any security, a member shall have reasonable grounds for believing that the recommendation is suitable for such customer upon the basis of the facts, if any, disclosed by such customer as to his other security holdings and as to his financial situation and needs."

Where a senior’s life situation dictates a conservative investment approach and a broker recommends high risk investments not designed to preserve the senior’s financial resources, the senior can have a suitability claim against the broker and his or her employer for damages. 

It’s likely your mother signed an arbitration agreement when she opened her brokerage account  and gave up her right to file her case in court.  Therefore, your mother needs to file an arbitration claim to recover her money. Nearly all arbitrations are conducted by arbitrators appointed by FINRA. 

Let me know if I can be of further assistance to you.

J. Michael Bishop, JD
Smiley Bishop & Porter, LLP
Atlanta, GA  30338
770-829-3850
Member of the national ElderCare Matters Alliance

Answer:  Here are some telltale signs of Financial Elder Abuse:

• Unusual or unexplained expenditures by the senior.
• Large cash withdrawals from the senior's bank account
• Numerous checks being written to a person or company that you do not know
• Wires or asset transfers out of the elder's bank or investment accounts that the senior cannot explain or doesn't want to talk about
• Numerous unexplained credit card charges
• Monthly account balances in the senior's bank or brokerage accounts that have suddenly declined dramatically
• The senior living without certain basic necessities even though he/she should have the money to afford them
• The senior recently lending money to someone you don't know
• Large amounts of money in the senior's investment account suddenly being invested in one product like a deferred variable annuity

From a practical perspective, there are a few simple things you can do to help your mother avoid Financial Elder Abuse:

• Have your mother's bank and brokerage firm send you duplicate copies of her monthly account statements.
• Also, most banks allow their account holders to set up daily email alerts.  Ask your mother to let you set up an email alert that sends you the daily balances on her bank accounts.

Let me know if I can be of further assistance to you.

J. Michael Bishop, JD
Smiley Bishop & Porter, LLP
Atlanta, GA  30338
770-829-3850
Member of the national ElderCare Matters Alliance

Answer:  It depends of the type of financial advisor handling your parents’ money. If the advisor is a stockbroker, it’s likely your parents signed an arbitration agreement when they opened their account. This means they agreed in advance to file their case against the stockbroker and his employer in an arbitration forum and gave up their right to file their case in court.  Normally, the Financial Industry Regulatory Authority (“FINRA”) is the arbitration forum where your parents’ case would have to be filed.  Arbitration has both advantages and disadvantages but is less costly than filing an action in court and will likely get faster results. The arbitrators selected to hear the case can award your parents compensatory damages, punitive damages and attorneys’ fees– just like a jury can in court. For an overview of the FINRA arbitration process, click on this link: http://www.sbpllplaw.com/2011/04/an-outline-of-the-finra-arbitration-process-for-customer-broker-disputes/

If the advisor is not a stockbroker and your parents did not sign an arbitration agreement, they can file their case against the advisor and his employer in court. Whether they file their case in federal or state court depends on a number of factors including:

a) where your parents live
b) where the advisor lives
c) where the advisor’s employer maintains its principal place of business
d) how much money your parents lost, and
e) the legal causes of action asserted in the complaint.

Let me know if I can be of further assistance to you.

J. Michael Bishop, JD
Smiley Bishop & Porter, LLP
Atlanta, GA  30338
770-829-3850
Member of the national ElderCare Matters Alliance

Answer:  FINRA’s Central Registration Depository (CRD) system contains registration and background information on stockbrokers. Certain information from this system can be accessed through FINRA’s BrokerCheck website at: www.finra.org/Investors/ToolsCalculators/BrokerCheck/.  

The BrokerCheck report which can be obtained through the website discloses complaints other clients have made against the broker, arbitration cases and lawsuits where the broker has been found liable and shows cases that are currently pending against him. The report also reflects disciplinary actions brought by securities regulators where the broker was sanctioned. Let me know if I can be of further assistance to you.

J. Michael Bishop, JD
Smiley Bishop & Porter, LLP
Atlanta, GA  30338
770-829-3850
Member of the national ElderCare Matters Alliance

J. Michael Bishop, JD
Partner in the Law Firm of Smiley Bishop & Porter, LLP
Atlanta, GA  30338
770-829-3850
www.sbpllplaw.com

Member of the national ElderCare Matters Alliance, Georgia chapter

I am an Atlanta native and partner in the law firm Smiley Bishop & Porter LLP. I received my law degree from Mercer University law school in 1984. For the last 26 years, my firm and I have dedicated our law practice to representing investors whose trust has been abused by dishonest financial advisors, stock brokers, investment advisors and financial planners. We have been fortunate during this time to have successfully represented numerous seniors who have been victimized by unscrupulous investment companies and their employees.  

Our firm prides itself on being keenly aware of the unique factors associated with representing seniors. Personally, I have served on the Board of the Elder Law section of the Atlanta Bar Association, am a member of the National Academy of Elder Law Attorneys and a Charter Member of the ElderCare Matters Alliance.  I am also a member of the Public Investors Bar Association. 

My law firm is based in Atlanta, Georgia but our practice is national in scope. We have represented investors in numerous venues throughout the Southeast and across the United States. We have successfully represented clients with claims against virtually every major Wall Street firm, including: Bank of America/Merrill Lynch, UBS/PaineWebber, Morgan Stanley/Dean Witter, Wells Fargo Securities/Wachovia Securities, Prudential Securities, Citigroup/Smith Barney, Shearson/Lehman Brothers, Bear Stearns, Credit Suisse, Ameriprise Financial, Morgan Keegan, and LPL Financial, as well as numerous others.