U.S. securities regulators say they are cracking down on investment frauds targeting seniors, particularly those pitched through free seminars.

The North American Securities Administrators Association appeared before a U.S. Congressional panel today, noting that, “senior investors are being targeted through ‘free lunch’ investment seminars by predators holding professional-sounding designations that can be nothing more than empty marketing tools”.

NASAA said it first identified the risk seniors face at free meal investment seminars in 2003, and since then, state securities regulators have been actively investigating and bringing cases to stop the spread of abusive sales practices that often emanate from these events.

Joseph Borg, president of the NASAA and director of the Alabama Securities Commission, said that state securities regulators also see another disturbing trend in the area of senior abuse. “Increasingly, licensed securities professionals, insurance agents, and unregistered individuals are using impressive-sounding but sometimes highly misleading titles and professional designations,” he said. While some of these designations reflect bona fide credentials in the field of advising seniors, many do not, Borg noted.

Borg told the committee that it is “exceedingly difficult” for prospective investors – particularly senior citizens – to determine whether a particular designation represents a meaningful credential by the agent or simply an empty marketing device. “The use of such professional designations by anyone who does not actually possess special training or expertise is likely to deceive investors,” he said.

He reported that a NASAA task force is developing a model rule that would be suitable for adoption by each NASAA member confronting the misuse of senior designations. “The model currently under consideration would attack the problem by making it a separate violation of law to use a designation or certification to mislead investors,” Borg said.

Borg also called upon Congress to explore proposals to assist law enforcement and prosecutors to ensure that those who take advantage of the elderly will be held accountable.

Also today, the U.S. Securities and Exchange Commission said it will release of findings from regulatory examinations of 110 firms offering “free lunch” investment seminars aimed at seniors at the commission’s second annual Seniors Summit to be held in Washington, D.C., on Sept. 10.

At the same time, the SEC announced that it filed charges stemming from a US$428 million securities fraud that victimized thousands of seniors and other investors throughout the U.S.

http://www.nasaa.org/NASAA_Newsroom/Current_NASAA_Headlines/7161.cfm