The Senior Safe Act, Legislation passed by the House in early July, will “hopefully” be signed into law by year-end, Ira Hammerman, SIFMA’s general counsel said Thursday, just as FINRA is moving ahead on its rule to protect vulnerable investors from fraud.
Susan Axelrod, FINRA’s head of regulatory operations, said Wednesday that the self-regulator would file “imminently” with the Securities and Exchange Commission for approval FINRA’s proposed Rule 4512 to help block elderly and vulnerable investors from financial exploitation.
FINRA, or the Financial Industry Regulatory Authority, filed the rule with the SEC on Thursday, just as the self-regulator and SIFMA, or the Securities Industry and Financial Markets Association, held a joint conference on senior investor protection in Washington.
Chip Jones, head of member regulation and education for FINRA, said in his conference remarks that thanks to FINRA’s Securities Helpline for Seniors, $2.3 million has been returned to investors, adding that the senior helpline gets about 50 calls per day from investors ranging in age 22 to 102.
Hammerman noted that senior financial abuse is a problem that will only continue to grow as the nation’s senior population increases by 10,000 individuals per day through 2030.
Elder financial abuse brings to mind “phishing scams offering to wire millions in exchange for account information,” but the reality is that financial exploitation “usually occurs much closer to home,” Hammerman said.
In fact, an estimated 55% of financial abuse in the U.S. is committed by family members, caregivers and friends, he noted, with a study conducted by NY State in June 2016 putting that number higher, with 67% of verified cases committed by family members alone.
Senior investors lose an estimated minimum amount of $2.9 billion per year in media-reported cases of financial exploitation, according to a MetLife study, and it has been estimated that only 1 in 44 cases of exploitation are ever reported to authorities, Hammerman said.