Enforcement News: Financial Exploitation of Seniors and Vulnerable Adults

By: Jeffrey M. Haber

Financial exploitation of seniors and vulnerable adults is a significant problem.¹ It is considered by many to be an insidious non-violent form of elder abuse in the United States. While a landmark MetLife study initially estimated that older Americans lose roughly $2.6 to $2.9 billion each year to financial exploitation, more recent research suggests that the cost may be materially higher, potentially exceeding $36 billion annually. These numbers, whether at the low end of the range or the high end, reflect not only a financial loss of assets but also an emotional harm inflicted on victims and their families.

Financial exploitation occurs when an individual – often someone in a position of trust – misappropriates, misuses, or steals the assets of a senior or otherwise vulnerable person. This can happen without the victim’s knowledge, or under circumstances where they do not fully understand or consent to the transactions being conducted. According to a study by the New York State Office of Children and Family Services, an estimated five million older adults and vulnerable Americans experience some form of financial exploitation every year, highlighting how pervasive and underreported this issue truly is.

In the investment context, the forms of exploitation are varied but often share a common theme: the pursuit of high commissions or personal gain by unethical financial professionals. Among the most prevalent abuses are churning (excessive trading to generate fees), unauthorized transactions, unsuitable investment recommendations, improper portfolio concentration in high-risk products, misappropriation of assets, and misrepresentations about an investment’s risk, characteristics, or likely returns. These tactics often deplete accounts, expose seniors and vulnerable adults to outsized risks, or leave them financially devastated at a stage of life when recovery is challenging at best.

A major reason for this vulnerability lies in the trust that seniors place in the professionals on whom they rely. Many older adults are unfamiliar with the complexities of financial markets or investment products. They often place significant trust in stockbrokers, financial advisors, investment advisers, and insurance agents – individuals who are supposed to act in their best interests. This trust, coupled with a reluctance to question what they do not understand, creates opportunities for abuse by those who exploit their authority or clients’ good faith.

Because many seniors may not recognize exploitation immediately – or may feel embarrassed or intimidated about reporting it – prevention often depends on attentive, proactive involvement from family members, friends, and other trusted individuals. Regular oversight, open communication, and periodic review of financial statements can serve as early-warning tools to spot problems before significant harm occurs.

In addition to the oversight of friends and family, regulatory oversight plays an important role in the protection of seniors and vulnerable adults from financial elder abuse.²

On January 30, 2026, the Securities and Exchange Commission announced that it filed a settled action against a Georgia resident (“Defendant”) for allegedly breaching his fiduciary duties to an elderly investment advisory client³ and misappropriating more than $9.8 million of the client’s assets. Defendant agreed to pay more than $13 million to settle the charges.

According to the complaint filed by the SEC in the United States District Court for the Northern District of Georgia, in March 2022, Defendant began misappropriating the client’s assets as well as assets from the estate of the client’s recently deceased sister. The SEC alleged that in February 2023, Defendant, without the client’s knowledge or consent, opened a brokerage account for one of the client’s trusts and transferred more than $9 million in securities from the client’s other accounts.⁴ While establishing the new brokerage account, Defendant allegedly took several steps to conceal his continuing misappropriation of assets, including authorizing the use of check writing from the account, setting up the log-in credentials for the account so that he could access and control the account, and creating an e-mail account to electronically impersonate the client.  As alleged, Defendant then misappropriated the client’s funds for his own benefit, including building a multi-million-dollar residence, purchasing vehicles, and buying vacation homes.

The SEC charged Defendant with violating Section 17(a)(1) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rules 10b-5(a) and (c) thereunder, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940.⁵

Without denying the SEC’s allegations, Defendant agreed to the entry of a final judgment, subject to court approval, in which he agreed to be permanently enjoined from violating the charged provisions of the federal securities laws and from participating in the issuance, purchase, offer, or sale of any security, except for purchases or sales of securities listed on national exchanges in his own personal accounts, and to pay $9,025,424.89 in disgorgement with prejudgment interest of $1,029,626.64 and a civil penalty of $3,000,000.

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Jeffrey M. Haber is a partner and co-founder of Freiberger Haber LLP. This article is for informational purposes only and is not intended to be, and should not be, taken as legal advice.

¹We have written about enforcement actions and litigations involving the exploitation of seniors and vulnerable adults on numerous occasions, including: SEC Receives Temporary Restraining to Halt the Financial Exploitation and Abuse Of Seniors; Enforcement News: SEC Charges Broker with Scheme to Defraud Mostly Elderly Retail Brokerage Customers and Investment Advisory Clients; Enforcement News: SEC Seeks Emergency Relief Against Investment Adviser Targeting Senior Investors “in a Classic Ponzi Scheme”; First Department Sustains Undue Influence and Unjust Enrichment Claims in Financial Exploitation Case; and Enforcement News: Ponzi-Like Scheme, Elder Financial Exploitation and Affinity Fraud.

²We wrote about regulatory efforts to protect seniors and vulnerable adults in the following articles: Bipartisan Legislation Introduced to Protect Seniors from Financial Abuse and Exploitation; The SEC Approves FINRA’s New Rules to Address the Financial Exploitation and Abuse of Seniors; and FINRA Submits New Rule for SEC Approval to Protect Seniors and Other Vulnerable Adults from Financial Exploitation and Fraud.

³According to the SEC, the client suffered from significant health issues and depended almost entirely on Defendant for both financial and personal needs, including paying bills, arranging a caretaker, purchasing groceries and household supplies, and managing his mail.

⁴The SEC claimed that Defendant allegedly obtained signatory authority over the client’s primary bank account and then misappropriated another $8.94 million.

⁵The Financial Industry Regulatory Authority barred Defendant in December 2025, for failing to produce documents and information requested in its investigation.