Overview
On February 10, 2025, a public FINRA Arbitration Panel ordered Morgan Stanley to pay a senior investor controlling a marital trust, life insurance trust, and residuary trust $843,000 for Morgan Stanley’s contribution to elder financial exploitation and abuse in the investor’s accounts. According to the filings, external fraudsters swindled the senior investor into liquidating investments into cash to purchase gold bullion bars, among other alternative assets.
Gold Bar Scams
A gold bar scam is a type of scam where fraudsters target victims online or by telephone and try to get them to buy gold bullion bars that are later relinquished to the fraudsters. The fraudsters commonly pose as federal agents and the tell the victims that the cash, gold bullion bars, and other assets the victim send to the fraudsters will be deposited into a new account where the funds will be “safe.” In the complaint at hand, the scammers repeatedly called the investor over a two-week period and convinced the investor to convert securities into cash and gold bullion bars under the pretext that the investor’s identify had been stolen and the investor needed to deposit the converted securities into a treasury account with a new social security number.
Broker-Dealers Are the First Line of Defense to Elder Financial Exploitation and Abuse
Broker-dealers and financial advisors are uniquely positioned to serve as a first line of defense to external elder financial exploitation and abuse. Not only can broker-dealers and financial advisors take steps to ensure transactions are legitimate, but also they can pause the execution of clients’ trades while they investigate suspicious transactions. Among other things, broker-dealers can ensure that every senior investor’s account has a trusted contact person. Here, despite the investor’s son being actively involved with the account, the financial institution authorized two large withdrawals without the son’s consent. In addition, Morgan Stanley did not take any steps to hold the execution of the transactions or withdrawal.
Impacted Investors
If you are a senior investor, or executor of an estate, and believe that your financial institution or professional did not protect your brokerage account from investment fraud, do not hesitate to contact our office at 800-556-3526 or complete our contact form for a free consultation. We work on a contingency fee basis to try to recover losses. In other words, if we do not obtain a recovery, you do not owe us any legal fees. Act before time runs out on your claim.