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
CHRIS COOPER & COMPANY, INC
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 matters
CHRIS 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 Financial
Elder 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.
How Are Investments &
Financial Services Distributed?
• 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
How Are Investments &
Financial Services Distributed?
• 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
How Are Investments &
Financial Services Distributed?
• 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
How Are Investments &
Financial Services Distributed?
• 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
How Are Investments &
Financial Services Distributed?
• 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
Elder Abuse –
Mandatory Reporters
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
Elder Abuse –
Mandatory Reporters
• 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
Elder Abuse –
Mandatory Reporters
• 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)
chris@chriscooper.com
www.chriscooper.com
Contact info for Susan Baida:
(646) 484-5212 (phone/fax)
info@eCareDiary.com
www.eCareDiary.com
CHRIS COOPER & COMPANY, INC