New York Securities Fraud Lawyers Blog
June 15 is recognized as World Elder Abuse Awareness Day. It was initiated by The International Network for the Prevention of Elder Abuse and is recognized by the United Nations. Elder abuse is defined as any act or neglect where there is an expectation of trust, which causes harm to an older person. Harm can be physical or mental, but it can also be financial, especially if there is a designated trustee or power of attorney, who takes advantage of the elderly. If you, or someone you know was, or may have been the subject of any type of financial elder abuse, you should consult with a knowledgeable securities fraud lawyer, like the lawyers at Malecki Law in New York.
Unfortunately, 60% of abusers are family members, and between 1-2 million people over the age of 65 were victims of elder abuse by someone they depended on for care. Aside from the tangible repercussions that affect the elderly and their families, it is also greatly immoral.
A power of attorney (POA) is a common, yet important legal instrument that designates a person to oversee someone’s personal and financial affairs by acting as their agent. POAs are common among elderly people, who become the principal of the POA, and must be of sound mind when executing the POA. It is a way to relieve the stress of handling their affairs by themselves, or to prepare for any future debilitating disorders, such as dementia. The agent is usually a person that the principal trusts to handle their affairs fairly, and with their best interest in mind. If you suspect that an elderly family member was not of sound mind when executing a POA, or if there was any foul play in handling your elderly family member’s financial affairs, you should speak with an investor protection attorney, like the lawyers at Malecki Law in New York.
Although a POA is useful, it can be easy for the agent to commit fraud once appointed, as they may have access to all financial accounts owned by the principal. There are several signs of financial elder abuse, including fraudulent signatures on documents, atypical or sudden unexplained patterns of cash or securities transfers, improper checks, selling off bonds or annuities prematurely, inducing an elder to sign documents, and unpaid medical expenses or bills, just to name a few. If you experience any of these signs, or are unsure if you did, you should consult with lawyers who are experienced in financial abuse, like the attorneys at Malecki Law.
Banks, or other financial institutions have a legal duty to report suspected elder financial exploitation by POAs or other abusers. Studies show that those that commit elder financial exploitation are more often than not an adult child or other family member. Unfortunately, there may be instances where these institutions are either complicit in fraudulent behavior, or neglect to notice red flags of elder financial exploitation. These instances would be in violation of the North American Securities Administrators Association’s Model Act to Prevent Vulnerable Adults from Financial Exploitation adopted in 21 states, “requiring securities dealers, investment advisors, and associated persons to immediately report knowledge or suspicion of abuse, neglect, or exploitation of vulnerable adults….” Moreover, it breaches its agreements with its customers as if the conduct is not halted and reported, because it means the firms and banks have failed to follow their supervisory and compliance procedures, as well as failed to properly train and supervise financial professionals how and when to report.
Furthermore, FINRA’s Know Your Customer Rule 2090, which states, “Every member shall use reasonable diligence, in regard to the opening and maintenance of every account, to know (and retain) the essential facts concerning every customer and concerning the authority of each person acting on behalf of such customer.” In other words, these institutions are obligated to review transactions, know their customer’s financial background, the POA and take action if needed. If you suspect that a financial institution mishandled, or was negligent in any of these circumstances, you should consult with FINRA experts, like the attorneys at Malecki Law in New York.
The importance of preventing elder abuse should not go unnoticed. June 15 serves as a beam of light, bringing attention to this matter that has historically received little recognition, both in America and internationally. If you suspect any form of financial elder abuse, you should take action as soon as possible.
Contributions by Brandon Amato, Summer Legal Intern and Student at New York Law School.