Since launching its Securities Helpline for Seniors in April, the Financial Industry Regulatory Authority said it has received more than 2,500 calls (lasting an average 25 minutes!) and helped senior investors recover close to $750,000 in voluntary disbursements from FINRA member firms.
In a Wednesday report on the helpline, FINRA said callers, who ranged in age from 22 to 100, voiced concerns about products such as variable annuities, mutual funds, real estate investment trusts and, most recently, energy sector securities.
The helpline aided FINRA in identifying several emerging scams, including fraud centering on taxes, bogus lottery winnings and binary options, all of which were flagged by FINRA and resulted in the self-regulator issuing investor alerts.
The helpline callers—who hail from all 50 states, the District of Columbia, Puerto Rico, Canada, Scotland, Vietnam, Israel, Ireland and the United Kingdom--also sought help on how to review an investment account statement and access investor tools and resources (such as BrokerCheck) to assist them with lost securities.
The most calls came from Florida, California and New York.
More troubling concerns were raised regarding potential unsuitable recommendations, fraud, or illegal activity involving brokerage accounts and investments, as well as abuse and exploitation of seniors by persons outside of the securities industry, the report notes.
The toll-free helpline, staffed by FINRA employees, seeks to resolve callers’ issues as quickly as possible, with frequent follow-up calls needed to glean additional information and documentation.
In October and November, helpline staff conducted more than 2,000 follow-up calls with investors, firms and third parties to pursue and resolve investor inquiries, the report notes.
If an initial assessment uncovers “serious misconduct” by a securities industry professional, FINRA opens an investigation. The self-regulator also refers to federal and state agencies those matters that fall outside its jurisdiction—and has made more than 75 such referrals since the helpline launched on April 20.
Separately, FINRA has made 50 referrals to Adult Protective Services (APS) in those instances where staff observed indications of abuse or exploitation.
In one case noted in the report, an elderly investor’s accountant called the helpline after finding a suspicious document among his 86-year-old client’s tax receipts. FINRA launched an investigation and discovered the client’s broker had borrowed $220,000 in 2012 and was repaying her $1,200 a month.
“FINRA notified the broker’s firm and within 10 days the firm terminated him,” the self-regulator states. “Separately, FINRA barred the broker from association with any FINRA member firm for his failure to cooperate with its investigation of his activities. The firm, previously unaware of the loan, made the client whole on the remaining balance owed and included a nominal interest amount.”
For other non-investment questions, staff frequently refers callers to AARP.
FINRA said it launched the helpline because of the growing incidences of financial scams targeting the elderly.
“FINRA created the Helpline to provide assistance to senior investors for concerns they have with their brokerage accounts and investments, and I am incredibly pleased with the positive impact it has had in just a few short months,” said Susan Axelrod, FINRA executive VP of regulatory operations, in releasing the report. “The Helpline has also served as a tremendous source of information as we actively engage with seniors, learn of and respond to issues they are experiencing, and use this real-time intelligence to inform our regulatory programs and provide effective practices to firms.”
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