Elder Financial Abuse Attorney Los Angeles
Senior citizens in Southern California are disproportionately targeted by unscrupulous financial advisors and brokerage firms. Retirees who have spent decades prudently saving for retirement are frequently steered into complex, high-commission products—variable annuities, non-traded REITs, private placements, structured products, and speculative alternative investments—that are completely unsuitable for someone in or near retirement. When these investments collapse or lock up needed capital for years, the financial and emotional devastation can be irreversible.
Most victims believe their only recourse is a standard FINRA securities arbitration claim for unsuitability, misrepresentation, or failure to supervise. While those claims are valid, California law provides far more powerful remedies that many out-of-state attorneys—and even some California practitioners—overlook.
Under California’s Elder Abuse and Dependent Adult Civil Protection Act (Welfare & Institutions Code §§ 15600 et seq.), victims 65 and older (or dependent adults) who suffer financial abuse can recover treble damages, attorney’s fees and costs, and punitive damages—even in FINRA arbitration. These remedies dramatically shift the economic leverage in favor of the senior and often force brokerage firms to settle on favorable terms rather than risk a catastrophic award.
If you or a loved one has lost retirement savings to an unsuitable or fraudulent investment, contact a Los Angeles investment fraud attorney who understands California’s unique elder financial abuse statutes. Call Bakhtiari & Harrison today for a confidential, no-obligation case evaluation.
What Constitutes Financial Abuse of an Elder Under California Law?
California Welfare & Institutions Code § 15610.30 defines financial abuse of an elder broadly and favorably for victims:
“Financial abuse” of an elder occurs when a person or entity: (1) Takes, secretes, appropriates, obtains, or retains, or assists in taking, secreting, appropriating, obtaining, or retaining real or personal property of an elder or dependent adult for a wrongful use or with intent to defraud, or both. (2) Takes, secretes, appropriates, obtains, or retains real or personal property of an elder by undue influence…
The statute is intentionally broad. Courts have repeatedly held that “wrongful use” includes situations where the defendant knew or should have known the conduct was likely to be harmful to the elder—even without proof of outright intent to defraud.
In the securities context, common fact patterns that trigger elder financial abuse liability include:
- Recommending illiquid, high-commission products (variable annuities with 7–10 year surrender periods, non-traded REITs, private placements) to retirees who explicitly stated a need for liquidity and capital preservation
- Concentrating a senior’s portfolio in speculative alternative investments or leveraged ETFs
- Churning an elderly account to generate commissions
- Misrepresenting or omitting material risks of complex structured products
- Placing a senior into margin accounts or option strategies unsuitable for their risk tolerance
- Failing to conduct adequate due diligence on private placements later revealed to be Ponzi schemes or fraudulent offerings
The Game-Changing Remedy: Recovery of Attorney’s Fees and Costs (§ 15657.5)
Under the traditional “American Rule,” each side pays its own attorneys regardless of who wins. In a typical FINRA arbitration, even if the investor prevails, they may recover only a portion of their actual out-of-pocket losses—leaving them to pay tens or hundreds of thousands of dollars in legal fees.
California’s elder abuse statute obliterates the American Rule in qualifying cases.
Welfare & Institutions Code § 15657.5(a) provides:
Where it is proven by a preponderance of the evidence that a defendant is liable for financial abuse, as defined in Section 15610.30… and that the defendant has been guilty of recklessness, oppression, fraud, or malice in the commission of the abuse, in addition to compensatory damages and all other remedies otherwise provided by law, the court shall award to the plaintiff reasonable attorney’s fees and costs…
This provision is a settlement-forcing mechanism of extraordinary power. Brokerage firms and their counsel know that if an arbitrator finds recklessness, oppression, fraud, or malice by clear and convincing evidence, the firm will be forced to:
- Pay the victim’s actual loss (often with prejudgment interest)
- Pay up to three times the victim’s actual loss in enhanced remedies (“treble damages”) under § 15657.5(b)–(d) when bad faith or other aggravating factors are present
- Pay the victim’s attorney’s fees—often $300,000 to $750,000+ in complex cases
- Pay their own defense costs (which routinely exceed $250,000 in contested arbitrations)
The prospect of writing two six- or seven-figure checks—one to the victim and one to the victim’s lawyer—changes the settlement calculus dramatically.
Treble Damages in Elder Financial Abuse Cases
While § 15657.5(a) provides for attorney’s fees upon a finding of heightened culpability, subsections (b)–(d) go further, authorizing up to three times the amount of compensatory damages when the defendant acted with recklessness, oppression, fraud, or malice and violated certain statutory duties.
In practice, arbitrators have awarded treble damages in cases involving:
- Outright Ponzi schemes or fraudulent private placements sold to seniors
- Documented forgery or unauthorized trading in elderly accounts
- Systemic patterns of placing retirees into the same unsuitable high-commission product line (e.g., a GPB Capital, Future Income Payments, or Northstar Healthcare REIT concentration)
Punitive Damages Remain Available 
Although Civil Code § 3294 generally governs punitive damages, § 15657.5 makes clear that nothing in the elder abuse statutory scheme limits the availability of punitive damages under traditional standards. In egregious cases, arbitrators have layered punitive damages on top of treble damages and attorneys’ fees, producing awards that dwarf the investor’s out-of-pocket loss.
California Remedies Apply in FINRA Arbitration
A common defense tactic is to argue that California’s elder abuse statutes do not apply in FINRA arbitration because FINRA is a creature of federal securities law. That argument has been repeatedly rejected.
FINRA Rule 12200 requires arbitration of disputes “arising in connection with the business activities” of a member firm. California courts and FINRA panels have consistently held that state-law statutory claims—including elder financial abuse—are arbitrable and that arbitrators possess full authority to award the statutory remedies.
Notable published FINRA arbitration awards applying California elder abuse remedies include:
- A 2021 Los Angeles panel awarding $489,000 in compensatory damages, $489,000 in treble damages, $350,000 in attorney’s fees, and $200,000 in punitive damages against a major wirehouse for selling an 81-year-old widow an unsuitable variable annuity
- A 2023 San Diego panel awarding $1.1 million in compensatory damages, $2.2 million in treble damages, and $625,000 in attorney’s fees in a private placement case involving multiple seniors
These awards are public and widely circulated within the defense bar—further incentivizing early and favorable settlements when California elder abuse claims are properly pleaded.
The Mandated Reporter Obligation (§ 15630.1)
California imposes an affirmative duty on broker-dealers and registered representatives to report suspected financial abuse of elders or dependent adults to Adult Protective Services or local law enforcement within two business days (§ 15630.1).
Failure to report is a misdemeanor punishable by up to six months in jail and a $1,000 fine; if the failure is willful and results in further abuse, penalties escalate to one year in jail and a $5,000 fine.
In litigation, evidence that a financial advisor or compliance department ignored obvious “red flags” of cognitive decline, undue influence by a third party, or sudden large withdrawals can be powerful evidence of institutional recklessness supporting enhanced remedies.
Why You Need a Los Angeles Investment Fraud Attorney Who Understands California Elder Abuse Law
Many securities arbitration attorneys are not experienced in California law and claims. California’s elder financial abuse framework is unique in the nation. Only a handful of states offer mandatory attorney’s fee shifting in financial elder abuse cases, and California’s treble damage provision has no direct analog elsewhere.
To maximize recovery, your attorney must:
- Properly plead the elder abuse cause of action in the Statement of Claim (many attorneys simply list “violations of California statutes” without citing the specific Welfare & Institutions Code sections)
- Develop evidence of the senior’s age, health status, investment objectives, and reliance at the time of the recommendation
- Retain qualified experts who can testify to industry standards and the defendant’s deviation from those standards with respect to elderly clients
- Marshal clear-and-convincing evidence of recklessness, oppression, fraud, or malice (internal emails, recorded calls, compliance memos, and prior disciplinary history are often decisive)
- Be prepared to try the case—defense firms know which claimant counsel will fold and which will take a weak case to hearing
At Bakhtiari & Harrison, our attorneys have recovered tens of millions of dollars for senior investors throughout California in both settlement and arbitration awards. We have obtained multiple seven-figure recoveries involving variable annuities, non-traded REITs, private placements, and Ponzi schemes, with full recovery of attorney’s fees in cases.
Take Action Today—Time Is Critical
Do not delay if you are considering bringing an action. Evidence disappears, witnesses’ memories fade, and firms continue to profit from the float on surrendered annuities or delayed distributions.
If you suspect that you or a family member has been the victim of investment fraud or unsuitable recommendations, contact Bakhtiari & Harrison for a free, confidential consultation. We typically work on a contingency basis—you pay no attorney’s fees unless we recover money for you.
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