Higher Penalties Set For Scams Against Seniors


Fed up with purported financial advisers preying on unwitting older people, Arkansas investigators last year staged an undercover sweep of one of the hucksters’ favorite showcases — free lunch seminars, reports the Wall Street Journal. The sweep triggered several investigations of financial firms. It also uncovered enough in the way of shady practices — misleading claims, underplayed risk — to prompt legislative action. A new Arkansas law, effective July 1, doubles the civil penalties for financial securities violations when the victim is 65 or older.

Arkansas is one of a number of states that are passing or amending securities and criminal laws to impose “enhanced penalties” on people who commit financial crimes against seniors. Similar legislation is expected to be proposed in Congress next month. Such laws are drawing criticism from some legal experts who oppose singling out seniors for protection. Critics say the laws amount to reverse discrimination by implying that older people aren’t sophisticated enough to keep from being taken in by sales pitches. Jonathan Macey, deputy dean of Yale Law School, says an enhanced penalty law regarding seniors isn’t unconstitutional, but “I think it’s just stupid. There are all kinds of vulnerable groups in society, like poorly educated recent immigrants, et cetera. The bad guys will just target them.”

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