Senior Investors are being targeted in record number by scammers with sophisticated investment fraud schemes designed to steal their retirement savings.
Last year in the U.S., such schemes stole $5 billion of Seniors’ nest eggs.
Fraudsters reach out to Seniors via social media apps (e.g. WhatsApp) or text messages and spend weeks or months building their trust. Once they have gained their trust, they then pitch investment ideas such as crypto with enormous “guaranteed” returns. They direct the Seniors to transfer money out of brokerage and bank accounts to a fake trading platform, whereupon their funds vanish.
Such scams are called “pig butchering schemes”, derived from a Chinese term referring to fattening up a victim before slaughtering them by stealing their life savings.
Recently, FINRA, the brokerage firm financial regulator, issued a warning and a new rule for brokerages designed to protect Seniors from investment fraud schemes.
The Rule requires firms to notify a “Trusted Contact” (usually a family member) of suspected investment fraud in a Senior’s account and enact a “Speed Bump” and delay any transfers while it investigates the potential fraud.
Banks have “anti-money laundering (AML) rules” designed to track and arrest fraudulent transactions.
If a firm fails to follow these procedures, it could be responsible for a Senior’s investment fraud losses. Victims should contact an investment fraud lawyer to seek to recover their investment losses.
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