US Regulators Take Aim at Securities Fraud against Older Investors

By Aaron Poehler

Published on September 12, 2007

The recent investigation into so-called "free lunch" seminars largely confirmed the old saying that there is, in fact, no such thing: 100 percent of the seminars were actually sales presentations. Of the 110 securities firms investigated, 50 percent made exaggerated claims at such meetings, 23 percent made unsuitable recommendations or offered inappropriate advice, and 13 percent appeared blatantly fraudulent.

Free lunch seminars offering attendees a complimentary meal in exchange for listening to a sales presentation are commonly held at upscale hotels, restaurants, retirement communities, and golf courses. The investigation showed that nearly 80 percent of senior Americans have received a free lunch seminar invitation and 60 percent have received six or more such invitations in the past three years.

Regulators say older Americans are often targeted for securities fraud not because they are less sophisticated, but because 75 percent of the nation's consumer wealth is controlled by households led by persons older than 50. Although only 15 percent of the nation's population is over 60 years of age, the same demographic comprises 30 percent of fraud victims. In the past two years, the SEC has taken action against more than 40 scams targeting older investors.

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