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SEC Commissioner Speaks on Protecting Elder Investors

Good morning. I am truly happy to join you today at the fall 2019 meeting of the Elder Justice Coordinating Council (“EJCC”). I want to thank U.S. Department of Health and Human Services Secretary [Alex] Azar, Assistant Secretary [Lance] Robertson, EJCC Coordinator [Toni] Bacon, and the Administration for Community Living for, once again, bringing the EJCC together to discuss our shared goal of protecting elder Americans. Thank you also to the EJCC members, participants, and presenters here today for their critical roles in furthering this effort. Before I say more, let me note that the views I express today are my own and do not necessarily reflect the views of the Commission, my fellow Commissioners, or the agency’s staff.

Investor protection is central tenet to the SEC’s mission, and is an objective that factors into every decision I make as a Commissioner. With respect to America’s older investors, the need for protection is indeed a priority for me. I see too far many enforcement matters involving elder adults, who have been either victims or targets of fraud. But, these stories are not confined to my work in government. Close friends and family have been targeted. This issue is personal—and not just for me. I have spoken to many people about this topic, and have yet to meet someone who does not have a family member or person in their lives who was a victim or target of elder fraud. We all know that these crimes may take place instantaneously, but can have financial, emotional, psychological effects that devastate victims for far longer.

I commend SEC Chairman Clayton for his efforts to spotlight this issue and encourage the agency’s work to combat fraud on older investors. Every division and office of the agency participates in this work. I would like to highlight a few examples.

  • The SEC staff engages in various programs with experts from within the agency and outside (including through this forum). Through these initiatives, we are able to better understand the prevalence, tactics, and targets of these types of fraud and understand what more we can do. A recent example is the SEC’s Roundtable on Combating Elder Investor Fraud organized by our Retail Strategy Task Force.[1] Much like this meeting today, the roundtable gathered regulators and other experts from various other agencies and organizations for a full-day, interactive discussion of the types of fraudulent and manipulative schemes currently targeting elder investors. The conversation explored views on potential steps that regulators, regulated entities such as broker-dealers and investment advisers, as well as others, can take to identify and combat elder investor fraud.
  • The SEC’s Office of Investor Education and Advocacy regularly issues public alerts and bulletins to highlight problems and questions investors may encounter. Many of these materials specifically focus on informing and aiding elder investors.
  • The SEC’s Office of the Investor Advocate has also published reports on elder financial exploitation and how the SEC works to protect such investors.
  • The staff of the SEC’s Office of Compliance Inspections and Examinations searches for signs of fraudulent schemes perpetrated through brokerage and advisory accounts. This not only helps early enforcement action, but also informs the agency about ways our registrants are handling such situations, including where diminished capacity may affect customer decision making.
  • The SEC’s Division of Enforcement leads our efforts to punish those who mistakenly think they can get away with wrongdoing. Just last week, we announced that we filed an emergency action and obtained an asset freeze against the operators of a South Florida-based investment scheme that defrauded over 100 retail investors, many of whom are seniors.[2] Unfortunately, this is only the latest of such cases I have seen at the Commission. But, I am truly proud of the agency’s enforcement staff, who not only have the sense of urgency to act quickly in these matters, but are constantly improving their ability to detect such schemes as early as possible.
  • Lastly, many SEC employees volunteer and conduct outreach in elder communities and at events to educate folks about potential frauds as well as to become a name and a face that investors can call. Our staff in our regional offices across the country are very active in these efforts and I commend them for their passion in these efforts.

I will close by noting that it is only through collaborations like today that we can realize our full, collective potential to protect elder Americans from fraud. In this regard, many of the SEC’s efforts dovetail, or are done in conjunction with, those of state and federal regulators and agencies. We serve as partners with each other in this fight, and I am happy to see several of you here today. I look forward to opportunities for enhanced cooperation and support in the future. Finally, and I truly mean this—please come to us with ideas that can help us advance our mission.

Thank you again.

ENDNOTES

[1] See https://www.sec.gov/agendas/agenda-roundtable-combating-elder-investor-fraud.

[2] See “SEC Halts Penny Stock Scheme Targeting Seniors”, https://www.sec.gov/news/press-release/2019-245.

These remarks were delivered by Elad L. Roisman, commissioner of the U.S. Securities and Exchange Commission, on December 3, 2019, at the Elder Justice Coordinating Council Fall 2019 Meeting in Washington, D.C.

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