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— Ben Franklin said that time is money. Fast-talking stockbrokers and other investment peddlers say it a different way: The elderly are a ticket to quick riches.

If an old person suffers an unjust monetary loss and goes into arbitration or court, the brokerage house, knowing the old folks have little time left, often go into a stall. And in any case, arbitration is stacked in favor of the brokerage house, points out San Diego attorney A. Kendall Wood.

Older people are more vulnerable to a fast-buck pitch because they come from a more trusting generation. And they're lonely. But there's another reason: Most don't use the Internet. Regulatory bodies such as the Securities and Exchange Commission and National Association of Securities Dealers warn of sleazy investments on their websites, but old folks often don't tap in.

Consider, for example, promissory notes that are peddled to unsuspecting investors. The SEC warns that promissory notes (issued by corporations to raise money) are seldom sold broadly to individual investors. Such notes "often turn out to be scams" aimed at the elderly, warns the SEC. Salesmen make commissions of 20 or perhaps 30 percent.

In 1993, Lewis Simon was 84 years old and his wife Bessie was 87. They gave their only child, Ruth Parton, power of attorney over their estate, according to an arbitration filed by attorney Ron Marron. In 1997, with her father blind and terminally ill, Parton went to the San Diego offices of Spelman & Co.

According to the complaint, broker Randy Howell convinced Parton to sell a risk-free U.S. Treasury note and buy a $210,000 promissory note with an annual yield of a seductive 11 percent, representing 43 percent of the elderly couple's liquid assets. But Howell never told Parton that the note was secured by a bunch of used-car installment contracts in Texas.

The issuer went into bankruptcy and the family lost a bundle, but Howell and Spelman raked in $17,500, according to the complaint. The attorney defending the claim refuses to comment.

Then there are James and Christine Demshok, both in their 70s. James has been diagnosed with cancer. James Reyes of San Diego's Allen James Financial, representing himself as a financial planner, recommended that the Demshoks invest in a promissory note of McGarn's Allstate Financial. It was said to be a conservative investment paying 9 percent.

Almost as soon as the Demshoks invested, McGarn's filed bankruptcy in Tampa. It turned out that Pennsylvania had issued cease-and-desist orders against McGarn's. Nevada later did the same. Arizona had issued a cease-and-desist order against so-called estate planners selling McGarn's promissory notes. McGarn's had been ordered to pay $1.8 million in restitution to investors. The lawyer handling the defendants' case refuses to comment.

"What I find egregious about the Demshok and other McGarn's cases is that the investment product is being represented to the client under the guise of estate planning," says Jeffrey P. Lendrum, the attorney handling the Demshok complaint.

Both the SEC and NASD warn on their websites about variable annuities. These are insurance contracts with a death benefit and deferred benefit payments. But annuities are sold, not bought. Salespeople get a juicy up-front commission. There can be front-end and back-end sales loads, administrative and mortality-risk charges and fees, warns the NASD.

Of critical importance are the securities that go into the variable annuity. During the raucous 1990s, salespeople sold annuities that were loaded with high-risk mutual funds. San Diegan Garner Stroud, 86, and his wife Inez were sold a variable annuity by their estate planner, Jeffrey E. Reed, according to an arbitration filed by Marron. Reed told Garner Stroud that he could make 10 percent a year through a variable annuity with portfolio investments of only moderate risk. But according to the complaint, the underlying securities in the annuity were 100 percent in risky equities. The annuities plunged by 50 percent in a year and a half.

The attorney representing Reed and other defendants did not respond to a request for comment.

Irene T. Schmitt, 88, investing through Wall Street's Salomon Smith Barney, lost $200,000, partly by putting money in variable annuities chock-full of speculative stocks, according to an arbitration filed by Wood.

But she lost in the more traditional ways, too -- particularly churning, by which brokers rake in commissions through rapid buying and selling of customers' stocks. During the first six months of one year, the annual turnover rate of stocks in her portfolio was a staggering 300 percent, according to the complaint. Smith Barney claims that Schmitt had requested more aggressive investing.

Importantly, elderly customers of modest means should not be put in speculative stocks. Chester F. Hinrichsen, 83, of San Marcos was put into gamy equities, although he stated he wanted to take only moderate risks, according to an arbitration filed by Marron. One mutual fund was billed as "balanced." But 10 percent of the money could go into extremely low quality junk bonds and 15 percent into illiquid securities. A full 25 percent could be shorted -- a bet that stocks will go down. That's gambling.

Also, the broker, Thomas E. Westlake, and his employer would share in a 10 percent kickback on a less-than-liquid real estate investment trust, according to the complaint. The defendants' attorney did not answer queries.

While still in their novitiates, brokers learn about suitability. The customer's risk tolerance and assets are key. That's particularly true with elderly people who may not live long enough to see highly volatile stocks swing back up from periodic funks.

In 1999, Judith A. Biggs became co-trustee of the estate of her very elderly parents. It was invested in low-risk mutual funds, fixed- income securities (such as bonds), and cash, according to a Superior Court suit filed by Del Mar's Timothy C. Karen. In early 2000, broker Philip Gair of La Jolla's First Wall Street convinced Biggs and her father, 88, that the account should be shifted to stocks that could grow at 10 to 12 percent a year with limited downside risk.

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