Elderly Investors

Elderly investors are always "protected subjects" from the eyes of regulators. Besides common mis-selling cases, they should also be protected from the "boiler room" type, fraudulent activities.

Yesterday US SEC filed an "emergency enforcement action" to halt an ongoing fraudulent offering of shares in a company called One Wall Street. SEC even sought temporary restraining orders to freeze the defendants' assets.

According to SEC, the defendants have obtained since 2003 over US$1.6 million from at least 64 investors, most of them are senior citizens who purchased the unregistered stock of One Wall Street.

The defendants made (verbally and in writing) the following false and misleading statements:

• One Wall Street would soon conduct an IPO.
• E*TRADE was negotiating to merge with One Wall Street.
• One Wall Street would use the investment proceeds solely for business purposes.

Actually all of the above statements are lies - no IPO, no merger, and the investor funds were even used to pay one dependent's "personal expenses" (including "adult entertainment services").

Investment fraud is a bit different from other scams. Generally the deceivers take advantage of old-aged persons' fear and sympathy, but investment fraudsters grasp their greed. It is easier to arrest the fraudsters than to educate the elderly investors that "wealth creation" is not a piece of cake!