Protecting older adults from sweetheart scammers

Adults can become more vulnerable as they age, especially as their loved ones and close friends begin to pass away. These circumstances can often make them feel lonely, defenseless and sad during this tough transition. Unfortunately, this could subject them to what some call the "sweetheart scam," where older adults can be tricked out of money through the ruse of an online stranger's love and attention.

What is a sweetheart scammer?

Rochester based investment manager scams hundreds in Ponzi scheme

Perry Santillo, a Rochester-based investment banker, admitted to scamming hundreds of investors in a national Ponzi scheme.

According to court papers, Santillo and his business partner gained close to $115.5 million from close to 1000 investors from 2012-2018. He reportedly still owes them $71 million in principal.

Securities fraud and abuses still a problem for investors

The security industry involves a number of different forms of investments, such as mutual funds, bonds, stocks and much more. While these types of investments can be quite different, as securities they all involve investments made by entities and individuals with an expectation of yielding profits. Federal laws are in place to protect people and their investments from abuses, but unfortunately securities fraud and other abuses still take place.

New York companies that issue securities are required to disclose information that affects the value of investments. However, if a company files documentation that does not accurately reflect those values, makes inaccurate financial claims or engages in improper accounting practices, then it may have committed fraud. Investors who are misled by this type of fraud often sustain significant financial losses.

Can you identify unsuitable investments?

An unexpected investment loss can be upsetting, and your initial reaction may be to place the blame entirely on yourself. However, you may want to consider that decisions made by an adviser or broker could be responsible for the loss. Even if you had what you believed to be a strong and trusted relationship, it is possible that a broker may have made unsuitable investments.

Not all losses are due to unsuitable investments or misbehaving brokers, but some are. You should ask yourself some important questions if you suspect that your losses were caused by more than the standard risk of investing. For example, were you misled about the risks associated with your investments? Did your broker or adviser fail to even disclose any of the risks?

Affinity fraud: Insidious, damaging and not uncommon

It’s natural to want to trust someone you share a community with. Maybe it’s another member of a tight-knit professional organization, or someone who goes to the same place of worship that you frequent. You can identify with them – so they can’t be a bad person, right?

Unfortunately some people take advantage of this natural trustworthiness, using the status of this community to defraud its members. And this tactic, called affinity fraud, happens more frequently than many people realize.

How could a broker misrepresent an investment?

Many people agree that investing involves risk. The extent of your vulnerability can vary depending on the situation. But can you always trust your broker to guide you toward a good option?

Brokers are trained and licensed to guide you in making wise investment decisions according to your goals. Unfortunately, misrepresentation of an investment opportunity could devastate your financial future.

Woman arrested for securities fraud scheme

Authorities claim that a woman purposely lied to investors about the purposes of her investment fund as well as its performance. Accused of committing securities fraud, she allegedly ran a $100 million scheme that affected many different investors. It can be extremely distressing when a New York investor learns that his or her funds have been purposely misused, but there are options for moving forward and seeking compensation.

The 59-year-old woman ran the investment scheme between Feb. 2016 and Aug. 2019. During that time, she collected approximately $100 million from various investors. She allegedly convinced these individuals to invest in her company by providing false information, such as a falsified summary that showed positive returns. However, authorities say the company's brokerage accounts had actually lost around 50% of their value.

All too often the purpetrators of this kind of activity do not have sufficent assets to compensate the victims. TIMOTHY J. DENNIN, P.C. has uncovered numerous ponzi schemes and has succesfully sued the broker dealers employing the individual fraudsters and recovered millions for such victims. 

How to identify and prove securities fraud

Most experienced investors understand that there is no such thing as a no-risk investment. Regardless of how secure an opportunity may seem, no investment has an absoblute guarantee against loss. So how can one prove that a loss was the result of securities fraud rather than a natural outcome of investing? Understanding the initial signs of securities fraud can help.

When working with brokers in New York, investors should expect regular and reliable contact. If a broker suddenly stops answering or returning calls, it could be a sign that fraudulent activity is going on. Discontinued contact can feel especially distressing for an investor who has spotted unauthorized transactions, transactions that do not seem to make sense or unexplained credits or debits on his or her accounts.

Four common investment scams

Getting swindled can be an adverse situation to overcome. You thought you were making a wise choice that could positively affect your financial future, instead a wise-talking investment scam artist manipulated you.

Now, you’ve put up money for a debatable investment – or no investment at all, and in most cases, that money is gone forever and won’t be aiding you in your quest toward a more secure financial future.

Securities litigation may be necessary for these abuses

With any type of investment, there is usually an opportunity for losses. Most New York investors understand this and take careful precautions to minimize potentially significant losses. However, those losses can sometimes be attributed to things outside of the nature of investing. For people who have suffered financial losses because of another person's wrongful actions, securities litigation could help recover some of those damages.

Companies of all sizes and reach can be engaged in securities abuses. Common abuses include fraud and market manipulation. Allegations of company fraud usually relate to inaccurate or undisclosed relevant information, such as accounting practices, financial statements, takeovers and more. Market manipulation is when a company engages in activities that promote false impressions of its security, price movement or trading activity. Both of these abuses can lead to serious financial losses for investors.

Contact Timothy J. Dennin

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