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Pension Fraud

Houston Pension Fraud Attorney

Many workers in Texas approaching retirement age are discovering that years of economic decline and turmoil in the United States have drastically reduced the value of their investment portfolios. People who established retirement accounts with a carefully thought out personal financial contribution scheme are confronted with the prospect of delaying retirement. As workers face delaying their retirement plans, they have become prime targets for brokers and financial advisors trying to make money through retirement investment fraud.

Pension Investment Schemes

Texas securities brokers or financial advisors are under a duty to invest their client’s personal financial contribution in securities and other investment options that are suited to the needs of the investor. Promises of high returns on investment, low risk and assurances of money being available for retirement are frequently intended to lure the unwary investor into a pension scheme that borders on retirement investment fraud.

Popular pension scams employed by brokers and financial advisors include the following:

  • Wrap accounts in which an unwary investor deposits a large sum of money with a broker who earns a fee for managing the money in addition to the commissions made on the purchase and sale of stocks and other securities
  • Investment plans involving variable annuities that tie up a retiree’s money for years with significant risk while generating hefty commissions for financial advisors who sell them
  • Equity indexed annuities are complex investment instruments that offer promises of high returns but involve high risk and an inability to withdraw funds prior to maturity

Houston Breach of Fiduciary Duty

Brokers and financial advisors earn commissions on the investments they recommend to their clients. Brokers earn commissions each time a stock or bond is purchased or sold in a client’s account. Brokers who purchase and sell securities for a client’s account primarily to generate commissions for themselves might be guilty of breaching their fiduciary duty to the investor.

An example of a breach of fiduciary duty occurs when a financial advisor steers a retirement-aged investor into the purchase of variable annuities with false assurances of an income stream on which the client can live during retirement. Investors are not informed that income generation is not guaranteed with variable annuities.

Talk To a Criminal Defense Attorney

If you are looking to learn more about pension fraud and what it entails, then call Rand Mintzer, Attorney at Law at 713-862-8880 to set up a free consultation. Rand Mintzer can answer your questions and provide you with valuable legal advice.