September 11, 2009
Two New Legislative Proposals Introduced to Address Senior Investment Fraud
Congressional members have recently introduced two bills aimed at senior investment fraud.
Sen. Herbert Kohl (D-WI), chairman of the U.S. Senate Special Committee on Aging, and Senators Robert Casey (D-PA) and Kirsten Gillibrand (D-NY) introduced the “Senior Investment Protection Act” (S. 1661), which targets the misleading use of senior and retiree designations. Representatives Paul Hodes (D-NH) and Gwen Moore (D-WI) introduced the companion bill (H.R. 3551) in the House of Representatives. The Act would provide grants to states to fund additional resources, education materials and staff dedicated to cracking down on meaningless titles used by unscrupulous investment professionals to mislead investors about their expertise in senior financial issues. The bill, an enhanced version of an earlier proposal, now includes a provision to hold insurance professionals to a heightened suitability standard when recommending insurance products to seniors.
The lawmakers also introduced the “Senior Investor Protection Enhancement Act” (S. 1659/ H.R. 3550) to enhance penalties for violations of securities laws involving senior victims. It would strengthen regulators’ and law enforcement’s authority to penalize those who take advantage of the financial circumstances of the elderly.
(Descriptions are taken from a NASAA press release lauding these efforts.)
Personally, I would not expect either of these measures to be passed anytime in the near future. The energy for regulatory reform appears low in D.C., and lobbying efforts have greatly reduced the possibility that the proposal for a consumer protection agency for credit products will ever be enacted.
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