U.S. Senators Bob Casey (D-Pennsylvania) and Herb Kohl (D-Wisconsin), chairman of the Senate Special Committee on Aging, introduced a bill to help protect seniors from investment fraud.
According to a joint statement on Casey’s Web site, the Senior Investor Protections Enhancement Act would increase penalties for those who commit securities violations against people who are at least 62 years old. Under the Act, penalties for existing securities violations could include an additional $50,000 civil fine for each violation that is primarily directed toward, specifically targets, or is committed against a senior.
The bill would increase penalties for those who commit securities violations against seniors, including selling them products that are unsuitable for their age, failing to disclose fees, lock-ups of cash or large penalty charges, switching investments sold with the one marketed, or other material aspects of the investment. The statement said Americans older than 65 control an estimated $15 trillion in assets, a large portion of which are investable.
“Many seniors are discovering that their life savings may not be enough to last them throughout their retirement. As they turn to investments to bridge the gap, seniors need to know that they can trust the people who handle their money,” said Kohl, in the statement. “This bill will ramp up the punishment for those who advantage of older Americans’ well-earned retirement savings.”
The bill comes amid discussion from federal regulators about the threat of investment fraud to seniors. Last week the Securities and Exchange Commission (SEC) proposed a rule that would extend its jurisdiction to equity-indexed annuities, where many investment frauds toward seniors occur (see SEC Proposes Rule to Protect Senior Investors). In conjunction with the SEC, the Financial Industry Regulation Authority (FINRA) has long been working toward resolving the issue (see FINRA Offers Education on Early Retirement Scams and FINRA to Check Securities Firms’ Sales Practices with Seniors), and today released an online resource for employers and employees (see Online Resources Educate About Retirement Scams).