Broker Steals from Client with Dementia

Unfortunately, elder abuse is all too common. But the abuse is not only physical or psychological but also financial: seemingly legitimate brokers can manipulate and steal from aging communities, especially those with limited competence or memory issues. In 2019, $25 million was lost from individuals over 60 due to investment fraud. One recent instance exposes many of the problems with elder financial abuse.

In one instance, a former stockbroker for the firm LPL Financial was charged with multiple counts of exploiting and stealing from an elderly person. The losses totaled nearly $1.3 million from the client, who suffered from dementia and memory loss. The broker advised the client to move funds from her trust to her bank account to fund investments in one of the broker’s businesses, allegedly to make investments in real estate investment trusts. This happened over the course of approximately eight years. Instead of making the investments, the broker moved the funds from the investment fund’s bank accounts to his personal accounts, where he used the money to pay off personal debts and other expenses.

The broker exploited his personal relationship with his client and her late husband. After her husband passed, he “positioned himself as a friend and confidant” to the client, according to the SEC, and began to assert control and influence over the client’s affairs.

How to Protect Against Elder Financial Abuse

One crucial way to protect against elder financial abuse starts before the need for protection even arises. While your family members are still healthy and fully competent, create a power of attorney or trust with a trusted family member or friend as an agent who will be guaranteed to protect your loved ones’ best interests. Additionally, brokerage rules allow you to appoint a “trusted person” to an account of an elderly individual. There are separate powers of attorney for medical and financial decisions, so be sure to cover all of your bases. The agent will be able to make financial and medical decisions on the behalf of your aging loved one in the event they become incapacitated. Beginning as early as possible can help prevent opportunists from stepping in and assuming the role of guardian or advisor.

Recovering for Elder Financial Abuse

If your loved one has been a victim of elder financial abuse, you may be wondering if you have a claim. The Texas legislature recently passed a new law designed to crack down on elder financial abuse. This law, however, does not provide for a civil right of action, only criminal punishment. Skilled securities lawyers, however, can bring claims against broker dealers who commit elder financial abuse in civil court or arbitration. Whether preventing elder financial abuse from occurring or rectifying it when it occurs, contact an attorney to evaluate your options.

Speak with a Texas Elder Law Attorney About Your Concerns Today

If you wish to protect your family members from elder financial abuse, an elder law attorney can help. The Houston attorneys at McCulloch Miller, PLLC are skilled in a wide range of estate planning and elder law topics and can help you draft a plan to protect your aging loved ones from abuse. Call a member of our team today at (713) 903-7879.


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