Suspect Financial Elder Abuse? Tips to Spot, Stop & Report November 11, 2013 Suspect Financial Elder...

Suspect Financial Elder Abuse?

Tips to Spot, Stop & Report

November 11, 2013

CHRIS COOPER & COMPANY, INC

Welcome

“Our mission is to empower family caregivers with information, tools and resources. The goal is to help them become better managers of their loved one’s care.”

Meghana Rao


Today’s Presenter

Chris Cooper

• Owner and Founder of Chris Cooper & Company, Inc, a financial planning firm• Owner and Founder of ElderCare Advocates, Inc, a private geriatric care management and long term care consulting firm• Serves as Conservator of the Person and Estate under court appointment, and as Agent under a Durable Power of Attorney for Financial matters and Health Care mattersCHRIS COOPER & COMPANY,

INC

Financial Elder Abuse

A financial abuser is any person who “takes,

secretes, appropriates, obtains or retains…

property of an elder…”*

• For wrongful use

• With “intent to defraud”

• By “undue influence”

*California Welfare and Institutions Code 15610.30

Who Commits FinancialElder Abuse?

• Domestic—a family member or neighbor commits

a crime of opportunity

• Commercial—predatory enterprises exploiting elders,

including some annuities

• Financial institution employees—may actually perpetrate

financial elder abuse (for example, life insurance agents and

registered representatives of broker/dealers)

• Attorneys—can also be perpetrators of financial elder abuse

Causes of Elder Abuse

• Societal changes—increased mobility, strained economic

times and a smaller nuclear family make it more difficult to

care for aging family members

• Stress—emotional and economic stress, especially when the

responsibility for eldercare falls on a select few

• Disease—declining health, age-related diseases and

medications may alter the older person’s behavior

Financial Elder Abuse

Where financial abuse is proven by a preponderance,

plaintiff is entitled to:

• Compensatory damages

• All other remedies otherwise provided by law

• Mandatory attorney’s fees and costs (see Wood v. Santa

Monica: one-way fees)

• Cost of conservator (Sanders v. Lawson: but not

trustee fees)

How Are Investments &Financial Services Distributed?

• Caveat emptor—Wall Street, banks, broker/dealers

and insurance companies will put their interests ahead

of their customers

• Dodd-Frank Act—requires a fiduciary standard from

financial product salespersons, such as stockbrokers

(legally referred to as registered representatives of

registered broker/dealers)

• Conflicts with existing law—exempts securities firms

called broker/dealers from fiduciary standard if advice is

incidental to sale of financial products or securities.


• Failure of FINRA (Financial Industry Regulatory Authority)

to protect the public

– FINRA works for and is financed by the industry it regulates

• Failure to regulate

– Poor credit quality securities being packaged and sold to

the public as “safe” securities

– Expensive variable annuities, limited partnerships and

other packaged products


• Complete lack of transparency—not like a public court of

law; arbitrations are private

• FINRA does not know what is in the best interest of the

public, so the securities, banking and insurance industries

do not either


• A fiduciary standard cannot be enforced unless advice givers

are separated completely from the employment of a securities

broker/dealer, insurance company or bank, similar to medical

doctors and pharmaceutical and medical device

manufacturers


• Consumers can’t tell the difference between investment

advisors who actively manage investments and those who

sell passive mutual fund accounts with a fee wrapped around

• Consumers don’t know the difference between a Registered

Investment Advisor (RIA) and a Registered Representative

(RR) of a broker/dealer


• Consumer mistakenly believes that both RIA and

RR have a fiduciary duty to put the consumer’s interest first

• Cryptic disclosures create confusion about who advisors

really work for:

– “Mr. _______ is President of ABC Retirement Plan Solutions,

LLC and is a Registered Representative of XYZ Securities

Corp, member FINRA and SIPC. ABC Retirement Plan

Solutions LLC and XYZ Securities Corp are otherwise

unaffiliated.

Spotting Financial Advisor Abuse

• Look through all brokerage account activities, especially

looking for “unsolicited transactions” on brokerage confirm

statements

• Check for money being transferred from one liquid investment

(like a mutual fund) to a less liquid

one (like an annuity)—this is

modern day churning

Spotting Financial Advisor Abuse

• Watch out for

– Life insurance agents selling annuities with life insurance

proceeds (liquid to less liquid) to recent widows

and widowers

– Commission-earning insurance agents and registered

representatives being named as trustees, power of attorney,

and other fiduciary capacities, even when it is their own

family member

What to Do When You Suspect Financial Advisor Abuse?

• Report to adult protective services

• If funds are missing, file local police report

• Civil litigation: FINRA arbitration because of mandatory

arbitration clauses in all the brokerage account agreements

• Report to state insurance commissioner if any insurance

product, especially annuities, is involved

Signs of Financial Elder Abuse

• Significant withdrawals from elder’s accounts

• Lots of 1099-B reported transactions

• Unexpected changes in wills, power

of attorney, deeds (this leads to why

attorneys are the number one

professional abuser!)

• Adding other names to bank

accounts, brokerage accounts,

car titles, etc.

Signs of Financial Elder Abuse

• Late payment notices

• Utilities shut off, other things not being done

• ATM withdrawals

• Sweepstakes and lotteries, especially in foreign countries

• Chatting over instant messenger on Yahoo!, AOL,

Facebook, etc.

Elder Abuse – Mandatory Reporters

• Health care professionals: nurses, social workers,

doctors, etc.

• Clergy

• Others deemed to be in positions

to report suspected abuse such

as home care workers, and others

• Anonymous voluntary reporting


The American Bar Association directly addresses attorney’s

duty to an elderly client with diminished capacity in Model

Rules of Professional Conduct. Model Rule 1.14 provides

three guidelines:

• An attorney shall maintain a normal lawyer-client

relationship insofar as is reasonably possible


• If the attorney believes the client with diminished capacity is

at risk of substantial physical, financial or other harm, an

attorney may take reasonably necessary protective action

– This includes consulting with individuals or entities that have

the ability to take action to protect the client, such as seeking

the appointment of a conservator


• An attorney taking protective action for a client with

diminished capacity may reveal otherwise confidential

information about the client, to the extent necessary to

protect the client’s interest

– This ABA model has been

adopted by the majority of states

(but not California)

Chris Cooper & Company

Toledo, OH Office

5810 Southwyck Blvd., Ste. 100,

Toledo, OH 43614

(800) 352-7674

San Diego, CA Office

2750 Fourth Avenue

San Diego, CA 92103

(800) 352-7674

www.ChrisCooper.com

www.ElderCareAdvocates.com

Conclusion

THANK YOU!

Contact info for Chris Cooper: (1-800)-352-7674 (phone)[email protected] www.chriscooper.com


Contact info for Susan Baida:(646) 484-5212 (phone/fax) [email protected] www.eCareDiary.com

Suspect Financial Elder Abuse? Tips to Spot, Stop & Report November 11, 2013 Suspect Financial Elder...

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