Older investors targeted with investment scams, regulators say
Thursday, September 4th 2003, 12:00 am
News On 6
WASHINGTON (AP) _ Often living on fixed incomes and sometimes desperate about money, older investors are being targeted with complex investment scams promising huge returns as the stock market churns and health care costs climb, state securities regulators said Thursday.
Kenneth Reusser of Beaverton, Ore., an 82-year-old former Marine aviator and decorated veteran of more than 200 combat missions in three wars, says he lost $262,500 in a high-yield investment scheme he learned about from friends he met through a club called ``Life After 50.''
Reusser and his wife, Trudy, filed a personal bankruptcy petition last week, a step ahead of the anticipated foreclosure of their hand-built home worth more than $1 million.
``I'm here as a very embarrassed individual,'' Kenneth Reusser said at a news conference with state regulators. ``We just trusted the people.''
The North American Securities Administrators Association is alerting seniors to the dangers of investment fraud and urging them to take control of their finances. The group, which represents state and provincial securities regulators in the United States, Canada and Mexico, announced new investor education programs and a senior investor resource center on its Web site.
The regulators ``are deeply concerned that a perfect storm for investment fraud is brewing and our nation's 35 million seniors are most at risk,'' said Christine Bruenn, the group's president and Maine's securities administrator. ``To a senior living on a fixed income, no amount of money lost is too small, and could mean the difference between a secure and dignified retirement or a life of uncertainty and despair.''
Millions of people who are retired or soon-to-be retired are concerned, some even desperate, about their finances _ making them more vulnerable than ever to investment fraud and abuse, Bruenn said.
Scams currently targeting older investors involve sales of unregistered securities, bogus promissory notes and charitable gift annuities, viatical settlements in which terminally ill people sell their life insurance policies for upfront cash, and Ponzi schemes that pay some investors returns with money raised from later investors, according to the regulators' group.
It cited recent cases in Arizona, Delaware, Maine and Massachusetts. Bruenn said seniors are getting scammed in every state.
The regulators' group will monitor investment fraud issues relevant to seniors and develop education programs.