Individuals Settle FINRA Charges for Elder Financial Exploitation
Commentary by Steven Lofchie
Two general securities representatives (the "Representatives") settled FINRA charges (see here and here) of using exploitative trading practices against a cognitively impaired elderly customer.
According to FINRA, the Representatives executed "qualitatively and quantitatively" unsuitable trades in the elderly customer's accounts. FINRA found, among other things, that the Representatives conducted transactions involving the short-term trading of long-term investment products (i.e., income-producing bonds that had long-term maturity dates). In addition, one of the Representatives "exercised trading discretion" on behalf of the customer without his consent. As a result of the trading in the customer's accounts, the Representatives generated a total of $9 million in commissions between 2011 and 2012.
To settle the charges, the Representatives agreed, separately, to a permanent ban from associating with any FINRA member in any capacity.
Commentary
Isn't this the type of matter in which the DOJ should be involved? Why is generating trading commissions from a dying and incapacitated person any different than sneaking into his hospital room and stealing his watch and wallet?