In today’s Wall Street Journal, in an article entitled “How Troubled Brokers Cluster, Often Among Elderly Investors,” Jean Eaglesham and Rob Barry of the Journal investigated and reported on how troubled and shady brokers (that is, financial advisors with bankruptcies and financial problems, criminal charges, customer complaints, regulatory actions and investigations, terminations for cause, or combinations thereof), often prey on the elderly by setting up shop in geographic “hot spots” where elderly and retired persons live, providing financial seminars to these folk that include free lunches or dinners (and excessive sales pressure to boot). Brokers like this, not so fondly referred to as “plate-lickers,” often cluster in hot spots for the retired and elderly such as California and South Florida, according to the Journal’s investigation.
According to the Journal, the rate of households headed by people 65 and older with incomes over $100,000 per year was 50% higher in the combined hot spots than the national average. Meanwhile, state securities regulators generally do little to flag these hot spots or concentrate resources to policing them. More than 54,000 brokers in these hot spots have generated 8,981 complaints.
Among the troubled brokers reported:
Lloyd Mincy Jr. – Mincy, of Troy, Michigan, generated 16 red flags, including four customer complaints that settled for a total of $339,382 and two pending complaints alleging damages totaling $2 million. In 2012 he agreed to be fined $20,000 and suspended nine months by FINRA in relation to his sales of annuities. He was a former employee of Centaurus Financial, Inc.