Markets Wired

Good afternoon. I am very excited to join you today to discuss ways to combat elder investor financial exploitation and fraud. This is a topic that I know everyone in this room (and those watching via the web) care deeply about and so I am truly grateful that we are able to bring attention to it with a roundtable during World Investor Week.[1]

I have heard countless stories from countless people about elder adults they know personally who were either victims or targets of fraud. We all know someone. When people tell me these stories, they always highlight how awful the crime was, or how bad it could have been. The dialogue during today’s first two panels focused on those concerns as well.

I’ll be honest, this is something that keeps me up at night and I commend Chairman Clayton for his efforts to spotlight important issues like elder investor fraud that affect our markets and investors. In particular, roundtables like this give our agency a unique opportunity to listen to your perspectives in a forum that encourages openness and collaboration.

SEC staff is very focused on issues facing our older investor community. I applaud them for organizing this roundtable and for bringing together such an impressive group of experts.

Investor protection is fundamental to the SEC’s mission and rests at the core of the decisions I make as a Commissioner. I know how prevalent this problem is because the Commission is constantly presented with enforcement matters where fraudsters inflict significant harm on older investors. Falling victim to financial fraud can, and often does, lead to adverse physical, emotional, and psychological effects well beyond the financial damage. We recognize this, and the SEC’s efforts to combat fraud of older investors runs through every division and office of this agency. I would like to highlight a handful:

• Our Office of Investor Education and Advocacy regularly issues public alerts and bulletins to highlight problems and questions investors may encounter. Many of these materials specifically focus on elder investors.
• Our Office of Compliance Inspections and Examinations searches for signs of fraudulent schemes perpetrated through brokerage and advisory accounts. This includes how such registrants handle situations where diminished capacity may affect customer decision making.
• Our rulemaking efforts often have the goal of filling regulatory gaps, including through the efforts of the Divisions of Investment Management and Trading and Markets. Sometimes these efforts seek to protect investors by restricting what firms can do. At other times, however, the goal is to eliminate unnecessary barriers that might otherwise restrict the ability of firms to take practical steps to further investor protection.
• Our Division of Enforcement leads our efforts to punish those who mistakenly think they can get away with wrongdoing. Let me be clear—we will find you and we will punish you to the fullest extent of our abilities.
• Our Office of the Investor Advocate has published reports on elder financial exploitation and how the SEC works to protect senior investors.
• Lastly, many SEC employees volunteer and conduct outreach in elder communities and at events to educate folks about potential frauds as well as to become a name and a face that investors can call. Our staff in our regional offices across the country are very active in these efforts (in particular, our Philadelphia, Los Angeles, and Miami regional offices).

It is only through joint efforts, like this roundtable, that we can realize our full potential to protect elders from financial fraud. SEC registrants, like brokers and investment advisers, are important partners in the SEC’s mission to protect older investors. Professionals at these firms often are one of the last barriers to preventing investor harm. Additionally, many of our efforts dovetail, or are done in conjunction with, those of FINRA, other SROs, state regulators, and federal agencies (including the U.S. Department of the Treasury and the U.S. Department of Justice).

Elder financial fraud is by no means limited to brokerage and retirement accounts. Opportunities for fraud exist in deposit accounts and other areas where assets are held. Regulators and organizations outside of the securities industry are key partners in this fight and I am happy to see several of you contributing to this roundtable. Thank you again for your participation today, for your past work in this area, and for opportunities for enhanced cooperation and support in the future.

And now, I have the honor of introducing (via video) the Honorable Senator Susan Collins from Maine. Senator Collins is a longtime steward of the interests of older Americans. This includes serving as Chair of the U.S. Senate Special Committee on Aging. Senator Collins represents the citizens of Maine, which has the highest percentage of elderly residents. We will now hear Senator Collins’ views on the importance of efforts, like this, to root out elder financial exploitation and fraud.