Did Your Brokerage Firm Ignore Signs of Fraud?

At ChapmanAlbin, we help investors, especially elderly individuals, recover losses caused by fraudulent schemes and broker misconduct. Unfortunately, financial scammers often target seniors, knowing they may be more vulnerable to deceptive tactics. But what happens when a brokerage firm fails to step in and prevent financial exploitation?

Recently, a case highlighted just how crucial brokerage firm safeguards are. An elderly woman was contacted by fraudsters who convinced her to purchase $1.6 million in gold—draining her account completely. Despite the massive and unusual transaction, her brokerage firm did nothing to intervene. Arbitrators later determined that the firm should have flagged the transaction, contacted her trusted contact (her son), and/or placed a temporary hold on the transaction. Their failure to act resulted in devastating financial losses, but the ruling held them accountable.

Brokerage Firms Are Required to Protect Senior Investors

Brokerage firms have rules in place to prevent this kind of financial exploitation:

• Trusted Contact Rule – Brokerage firms must maintain a trusted contact person on file for senior investors. If suspicious activity occurs, they should notify this designated person before allowing the transaction to proceed.
• Financial Exploitation of Specified Adults Rule – Firms have the authority to place a temporary hold on transactions if they suspect financial exploitation of senior investors or other vulnerable adults.

Could You or a Loved One Have a Case?

If you or an elderly family member have been targeted by scammers and your brokerage firm failed to intervene, you may have grounds for legal action. At ChapmanAlbin, we are actively investigating cases where brokerage firms ignored red flags and allowed seniors to lose their hard-earned savings.

Contact us today for a free consultation. We’ll review your case and determine whether your brokerage firm’s inaction could make them liable for your losses.