During a “Seniors Summit” held on Sept. 10, 2007 at the Securities and Exchange Commission, regulators released a report summarizing the results of their examinations of “free lunch” investment seminars.
They looked at 110 securities firms and branch offices that sponsor sales seminars and offer a free lunch to entice attendees. The report concludes that 100% of the “seminars” were sales presentations, although most were advertised as “educational,” “workshops,” and “nothing will be sold.” Almost a quarter of the time they found indications that unsuitable investment recommendations were made. And 13% appeared to be fraudulent and were referred to authorities for possible enforcement or disciplinary action.
SEC Chairman Christopher Cox said, “These findings are a wake-up call for securities regulators, the financial services industry and especially older investors. Not only were virtually all of the ‘free lunch’ seminars sales jobs in disguise, but half made misleading or exaggerated claims, and more than a third had unsuitable recommendations or outright fraud. The SEC and our fellow regulators intend to put a stop to this. We will step in whenever false claims are being made. We will sanction crooks who try to feast on the life savings of older investors. And we will work with every honest securities firm to help them do more to ensure that their interactions with older investors fully comply with the securities laws. I applaud the securities examiners whose collective work has clearly shown that there’s no such thing as a free lunch.”
Free lunch seminars often have names like “Seniors Financial Survival Seminar” or “Senior Financial Safety Workshop,” and offer “free” advice by “experts” on how to attain a secure retirement, or offer financial planning or inheritance advice. The advertisements often imply that there is an urgency to attend: “limited seating available” or “call now to reserve a seat.”
The ultimate and trite conclusion is that “there is no such thing as a free lunch.” Everyone, and especially seniors should “watch their backs,” “buyer beware,” and “if it sounds to good to be true, it probably is.” My advice is to review your options, take time to think things over, and get additional opinions before you take any planning or investment action.
The full news release – with links to the report and other resources – is at:
http://www.sec.gov/news/press/2007/2007-179.htm