Financial Elder Abuse Exploitation Quite Common on Wall Street

Written by Adam Peck Category: Elder Law January 26th, 2013 2 min read

Mention “elder abuse” and most lawmakers conjure up images of the fleecing of Brooke Astor’s estate or an elderly relative kept in squalid conditions. Cases like these make for excellent tabloid fodder. In fact, recently the New York Post prominently featured a story about Cher Thompson, a young woman who allegedly bilked a deaf octogenarian with dementia out of his life savings.

What gets far less attention is perhaps the most prevalent form of elder abuse–the sort perpetrated by stockbrokers. The Financial Industry Regulatory Authority (FINRA), Wall Street’s governing and enforcement body, defines financial elder abuse as the “misuse of an older adult’s money or belongings by a relative or person in a position of trust.”

A clear-cut example recently made headlines in a number of financial trade publications. Stockbrokers Thomas B. Cooper and Peter L. Boorn at Beverly Hills-based StockCross Financial Services Inc. allegedly bilked 95-year-old David Wolfson of nearly all his assets and put his house at risk after recommending unsuitable and risky investments. The brokers dropped Wolfson as a client once they drained him of his cash. An arbitration panel awarded the elderly man triple damages, totaling $1.6 million. It was an unprecedented amount that underscored the severity of the abuse.

Exploiting the elderly is actually quite common on Wall Street. The temptation to commission-earning brokers is obvious. There isn’t a lot of money to be made managing the accounts of risk-averse investors who are looking to clip coupons and live off interest income from municipal bond funds, Treasuries or other safe investments. Some Wall Street firms just can’t but regard the elderly as ripe for the fleecing.

Another recent example was the case of Sergio M. Del Toro, who has been banned from the securities industry for defrauding a 90-year-old Minnesota nursing home resident of $511,000. Mr. Del Toro recommended that the elderly man put his entire net worth into the stock of a firm called 3rd Dimension, for which there was no market or publicly quoted pricing. Mr. Del Toro’s alleged motivation: a 15% commission, equal to about $76,600.

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Written by Adam Peck

Expertise: Personal Injury

Adam J. Peck, ESQ is a principal with Peck Law Group, APC. In 2008, Mr. Adam Peck received his Juris Doctorate from Whittier Law School where he graduated Cum Laude. His practice is primarily dedicated to representing Elders, Dependent Adults, along with their loved ones and family members, who have suffered horrific personal injuries.