What You Need to Know
- Bad actors are using self-directed IRAs as part of their scams with retirees and seniors.
- State securities regulators brought 53 enforcement actions in 2020 involving self-directed IRA scams.
- Digital assets and social media scams are also on the rise.
Self-directed IRA scams targeting seniors and retirees are growing, and state securities regulators are taking their concerns to Washington.
Melanie Lubin, Maryland Securities Commissioner and president of the North American Securities Administrators Association, said Tuesday during the group’s annual meeting, that NASAA “is optimistic that several lawmakers will join NASAA to examine policy solutions around self-directed individual retirement accounts. We know that gaps in the oversight of SD-IRAS increasingly threaten the retirement security of millions of Americans, and we’re working with Congress to address those gaps.”
Joe Borg, Alabama Securities Commissioner, said Tuesday during a panel discussion at NASAA’s annual meeting that “bad actors are using self-directed IRAs as part of their scams” with retirees and senior citizens. Scammers, he said, are incorporating self-directed IRAs into financial schemes.
“When you say the word IRA, it brings in visions of some sort of government oversight,” Borg said. “The problem is, most folks have no clue that a self-directed IRA does not have that same type of protections.”
State securities regulators have opened more than 80 investigations of suspect offerings tied to SDIRAs in each of the past two years, NASAA reported Tuesday.
In 2021, state-securities regulators reported more than twice as many state enforcement actions against promoters using SDIRAs, bringing 53 enforcement actions in 2020 compared to 24 enforcement actions in 2019.