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Sec Receives Temporary Restraining To Halt The Financial Exploitation And Abuse Of Seniors

  • Posted on: Apr 14 2017

In prior posts, this Blog has written about the financial exploitation and abuse of vulnerable investors (here and here).

The financial exploitation and abuse of vulnerable investors (e.g., senior citizens and the disabled) takes many forms. The most common involves: churning, unauthorized trading, unsuitable investing, over-concentrating an investor’s portfolio in a single type of investment or industry segment, and misrepresenting the risk or potential returns of an investment product for the purpose of generating high commissions.

Unscrupulous investment professionals (such as, stockbrokers, financial advisors and insurance brokers) often exploit the fact that many elder and disabled investors are not market savvy and financially sophisticated or are trusting of those in a position of knowledge and authority. They prey on the fact that elder and disabled investors are often hesitant to admit they do not understand what is being presented to them.

Vigilence by family members and trusted individuals in overseeing and monitoring the assets of the elderly and disabled is one way to help prevent and stop the incidence of financial exploitation and abuse. Contacting a lawyer is another. Sometimes, a criminal proceeding or an enforcement action is the most appropriate way to stop an abuser.

On March 27, 2017, the Securities and Exchange Commission (“SEC”) announced that it had sought and received an emergency asset freeze and temporary restraining order against Daniel H. Glick (“Glick”), a Chicago-based investment adviser and his financial management company, who were accused of scamming elderly investors out of millions of dollars.

According to the SEC, Glick and his unregistered investment advisory firm Financial Management Strategies (“FMS”) provided clients with false account statements to hide Glick’s use of client funds to pay personal and business expenses, purchase a Mercedes-Benz, and pay off loans and debts among other misuses.

As noted in the SEC complaint, Glick is no stranger to run-ins with regulators. In 2014, Glick was barred by FINRA and had his Certified Financial Planner designation and Certified Public Accountant license revoked for engaging in misconduct – conduct that included stealing money from elderly family members.

“As alleged in our complaint, Daniel Glick raised millions of dollars from elderly clients by claiming that he would pay their bills, handle their taxes, and invest on their behalf.  In reality, Daniel Glick used much of their money to do what was best for Daniel Glick,” said David Glockner, Director of the SEC’s Chicago Regional Office.

The SEC also named Glick Accounting Services, Glick’s business partner David B. Slagter, and Glick’s business acquaintance Edward H. Forte as relief defendants for purposes of recovering client funds that Glick transferred or paid them in the form of advances or loans.

The court issued a temporary restraining order against Glick and FMS at the SEC’s request, and issued an order freezing the assets of Glick, FMS, and Glick Accounting Services.

Takeaway

Despite recent legislative and regulatory efforts to protect senior and disabled investors, financial exploitation and abuse of vulnerable investors remains an all too common fact of life. Enforcement actions, like the one discussed in this article, are important reminders to the unscrupulous investment professional that financial exploitation and abuse of the elderly and disabled will be prosecuted to the fullest extent of the law.

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