Two bills have been introduced that focus on protecting senior investors from fraud and unscrupulous financial advisors. Americans 65 and older control nearly $15 trillion in assets.
The bills were introduced by U.S. Senators Bob Casey (D-PA), Herb Kohl (D-WI), Kirsten Gillibrand (D-NY) and Representatives Paul Hodes (D-NH) and Gwen Moore (D-WI). According to a release from Sen. Casey’s office:
The first bill, the Senior Investor Protection Act, creates a new grant program to assist states in their efforts to protect seniors from misleading financial advisor designations.
The grant would provides states with incentives to improve their own rules regulating the use of designations by encouraging them to adopt the North American Securities Administrators Association’s (NASAA) and National Association of Insurance Commissioners’ (NAIC) new model rules on the use of senior designations.
The grants are designed to give states the flexibility to use funds for a wide variety of senior investor protection efforts, including: hiring additional staff to investigate and prosecute cases; funding new technology, equipment and training for regulators, prosecutors, and law enforcement; and providing educational materials to increase awareness and understanding of designations.
Sen. Claire McCaskill (D-MO) is also a cosponsor of this bill.
The second bill, the Senior Investor Protections Enhancement Act, would target those who commit securities violations against seniors. Violations could include selling them products that are unsuitable for their age, failing to disclose fees, charging large penalty fees, or switching the investment product actually sold from the one that was marketed.
Under the Senior Investor Protections Enhancement Act, penalties for existing securities violations would include an additional $50,000 civil fine for each violation that is primarily directed toward, specifically targets, or is committed against a senior.
Under the legislation, seniors are defined as persons aged 62 or older, the age at which many orient their investments to be in conjunction with social security eligibility.
The bill would not interfere with legitimate investment advisors who recommend products and investments appropriate for their customers.
Sen. Jeanne Shaheen (D-NH) is also a cosponsor of this bill.