October 15, 2018

Elder Investment Fraud and Financial Exploitation Prevention Program—Legal

(Note: The pdf for the issue in which this article appears is available for download: Bifocal Vol. 35, Issue 6.)

 

Program Background

The Commission is pleased to announce that it has received a grant from the Investor Protection Trust and Investor Protection Institute to create and implement the “Elder Investment Fraud and Financial Exploitation Prevention Program—Legal” (EIFFE Prevention Program Legal). The Investor Protection Trust (IPT) is a nonprofit organization devoted to investor education. The primary mission of IPT is to provide independent, objective information needed by consumers to make informed investment decisions. The Investor Protection Institute (IPI) is a nonprofit organization that promotes investor protection by conducting and supporting research and education programs.

The goal of EIFFE Prevention Program Legal is to educate lawyers to:

  • recognize clients’ possible vulnerability to EIFFE due to mild cognitive impairment,
  • identify EIFFE in their clients, and
  • report suspected EIFFE to appropriate authorities.

The project will accomplish this goal by developing a model national continuing legal education (CLE) curriculum that is intended for practitioners in a wide array of specialties, such as elder law, trust and estate law, family law, general practice, business law, tax law, and administrative and government law. A collaboration between the ABA through the Commission, IPT, IPI, state securities regulators’ offices and state bar associations, the project will pilot test the model curriculum in up to six states. Once the pilot phase is complete, the program will be rolled out nationwide.

The EIFFE Prevention Program Legal complements the EIFFE Prevention Program Medical, which was launched in 2010 by IPT, IPI, the Baylor College of Medicine in Houston, Texas, and other partners to train doctors and other health care professionals. To date, more than 7,800 health care professionals have participated in a total of 86 continuing medical education sessions held in 32 states and the District of Columbia.

The EIFFE Prevention Program Legal will be directed by Commission senior attorney Lori Stiegel, with input from an advisory committee. The committee’s members include:

  • Jeanne Medeiros, Managing Attorney of the Pension Action Center at the University of Massachusetts Boston;
  • Tony Miles, District of Columbia Associate Commissioner for Securities and a trustee of the IPT;
  • Richard Milstein, an elder law practitioner in Florida, and a former member of the ABA Commission;
  • Dr. Robert Roush, director of the EIFFE Prevention Program Medical;
  • Catherine Seal, an elder law practitioner in Colorado; and
  • Kristi Vetri, a general practitioner in Illinois and liaison to the Commission from the ABA Solo, Small Firm and General Practice Division.

 

ABA/IPT/IPI Elder Financial Exploitation Survey

Nine out of 10 practicing attorneys surveyed by IPT, IPI, and the Commission as part of EIFFE Prevention Program Legal are willing to take part in a new campaign to address the estimated 20% of older Americans who have been the victims of investment fraud and financial exploitation.
Key findings of the new IPT/IPI/ABA survey which was completed by 674 practitioners include the following:

  • More than nine out of 10 attorneys (91.4%) say that elder investment fraud and financial exploitation is a “very serious” or “somewhat serious” problem.
  • More than one out of three attorneys (34.4%) says they are aware that they “are or may be dealing with the victims of elder investment fraud and financial exploitation.”
  • Roughly nine out of 10 attorneys (88.6%) would be willing to participate in a CLE program “about detecting, preventing, and redressing elder investment fraud and financial exploitation.”

In a news briefing event on July 29th, Don Blandin, president and CEO of the IPT, said: “We know that a shockingly large number of older Americans are already victims of financial swindles and millions more are in danger of being exploited in such a fashion. Front-line legal professionals who deal everyday with older Americans are ideally positioned to spot the impaired mental capacity that can leave seniors vulnerable to financial abuse. Our new program seeks to inform lawyers about the warning signs of elder investment fraud and financial exploitation. Our goal is to improve the communication among legal professionals, older Americans, adult children and state securities regulators in order to head off financial swindles before the damage is done.”

Commission director Charles Sabatino said: “Because lawyers play such a significant role in advising and serving an aging society, especially around financial matters, their role in spotting, preventing, and responding to financial exploitation needs to be as professional and effective as possible. Yet, it is not an area in which many are effectively trained. This project directly benefits the legal profession and the older clients whom they represent.”

One key issue in understanding the problem of elder financial fraud is the neurobiological basis for many seniors’ vulnerability to financial exploitation and unwise risk taking. Research shows that damage to the orbitofrontal cortex (OFC) of the brain, where executive functioning capacity is located, can make persons with mild cognitive impairment far less risk averse than they were before. (See http://www.plosone.org/article/info%3Adoi%2F10.1371%2Fjournal.pone.0043647.)

Dr. Robert Roush, director, Texas Consortium Geriatric Education Center of the Huffington Center on Aging at Baylor College of Medicine, said: “Normal age-related changes in financial decision making can be exacerbated by neurodegenerative conditions ranging from MCI to some forms of Parkinson’s disease. This is why all professionals with fiduciary responsibilities to older people need to know that these conditions can place their patients or clients at greater risk of financial exploitation than otherwise might be the case.”

Lori Stiegel, senior attorney at the Commission and EIFFE Prevention Program Legal project director, said: “An array of legal practitioners—not just those who specialize in elder law or trust and estates law—may represent clients who are experiencing or are vulnerable to EIFFE. For example, a business lawyer advising a client about selling his company needs to recognize indicia of diminished capacity. A lawyer who is ignorant of EIFFE and fails to recognize its signs may unwittingly participate in victimizing the client or fail to protect the client from harm, and as a result may face professional discipline and liability for malpractice.”

Want more details? The findings of the IPT/IPI/ABA survey are available online at http://www.investorprotection.org.

 

ABA Annual Meeting CLE Showcase Program

The kick-off event for the EIFFE Prevention Program Legal was the August 9, 2014, ABA Annual Meeting Showcase Program held in Boston, Massachusetts. The Epidemic of Elder Financial Exploitation: Ethical Traps for Lawyers & Skills Every Lawyer Needs was well-attended and engaged the audience on how elder financial exploitation (EFE) may affect them personally and professionally.

Commission on Law and Aging Chair David M. English moderated a panel of national experts [see sidebar]. The speakers covered three topic areas: demographic trends that increase the likelihood that lawyers will deal with diminished financial capacity and EFE in their families and in their work; the Mickey Rooney and Brooke Astor cases as frameworks for posing ethical and practical dilemmas and providing tips for addressing those challenges; and signs of vulnerability to EFE and recommended options for responding.

Confirming the breadth of the impact of EFE, the Commission was joined by 13 co-sponsoring ABA entities for the Annual Meeting program: Business Law Section; Center for Human Rights; Center for Professional Responsibility; Commission on Homelessness & Poverty; Commission on Disability Rights; Commission on Domestic & Sexual Violence; Criminal Justice Section; Health Law Section; Real Property, Trust and Estate Law Section; Senior Lawyers Division; Solo Small Firm & General Practice Division; Standing Committee on Lawyers’ Professional Liability; and the Tort Trial & Insurance Practice Section.

An expert faculty came together for the ABA Annual Meeting panel:

  • Lori Stiegel, EIFFE Prevention Program Legal director and attorney at the ABA Commission, provided an overview of the many forms of elder financial exploitation.
  • Patricia D. Struck, Wisconsin’s state securities regulator and a former trustee of the IPT, spoke about the role of securities regulators in educating investors and protecting them from fraud.
  • Dr. Daniel C. Marson, clinical neuropsychologist and professor in the Department of Neurology at the University of Alabama at Birmingham, discussed research on financial decision-making capacity that explains vulnerability to EFE.
  • Bruce S. Ross, a member of the legal team representing Mickey Rooney against his exploiter, discussed ethical issues and rules to consider when representing older clients.
  • Elizabeth Loewy, a lead prosecutor of the Brooke Astor case, addressed what her office considers when investigating attorneys involved in questionable trust and estate matters related to older or impaired clients.

 

What’s Next?

Stay tuned to Bifocal for more information and learning opportunities from the ABA/IPT/IPI collaboration! ■