FINRA Pursues Broker For Allegedly Trying to Bilk Elderly Investor with Alzheimer’s of $1.8M

The Financial Industry Regulatory Authority Inc. has filed an elder financial fraud case against broker John Waszolek, who worked for UBS Wealth Management (UBS) at the time of the allegations. According to the self-regulatory organization, in 2009, Waszkolek took advantage of an 81-year-old client when he had her appoint him as a beneficiary of her trust even though she lacked the “testamentary capacity” to make such decisions and would not have been able to protect herself from exploitation. Testamentary capacity refers to a person’s mental and legal ability to make or modify a will.

The elderly widow lived by herself and had been a client of Waszolek since 1982. However, contends FINRA, it wasn’t until 2008 as her health worsened that the broker allegedly began to go above and beyond his professional obligation to her. He was the one that purportedly took her to see the doctor, who diagnosed her with Alzheimer’s. The regulator also says that he met with an estate planning lawyer so that he could be appointed as his client’s agent and given power of attorney. He wanted her trust modified so that he would be named the residual beneficiary.

When the estate planning lawyer refused because the elderly women lacked testamentary capacity, Waszolek purportedly suggested that his client see another lawyer. The amendment made to her trust would cause some $1.3 million that was supposed to be divided among four charities to go to the broker instead. That figure would eventually go up to $1.8 million.

In its complaint, FINRA noted that the day after the amendment went into affect, Waszolek quit his job at UBS after three decades working for the firm and moved his business to Morgan Stanley Wealth Management (MS). He did not tell either firm that he had violated FINRA rules and firm policy by becoming a beneficiary to his client’s trust. Most firms consider it a conflict of interest for a broker to become a beneficiary to a client’s estate and don’t allow it.

It wasn’t until after the elderly widow died that Waszolek’s actions were discovered. The bank that was getting ready to issue the money refused to give Waszolek his funds unless Morgan Stanley approved the asset transfer. The firm refused, reprimanding the broker. The firm fired him in 2011. Waszolek has been working at Raymond James & Associates (RJF) since 2012.

Unfortunately, it is not uncommon for a broker accused of misconduct at one firm to move to another broker-dealer and continue working with clients.

After Morgan Stanley and the bank denied him access to the $1.8 million from the trust, Waszolek filed a petition with the court to make the bank and the charities disburse the money. A settlement was reached and Waszolek received $50,000. However, he had to agree that the trust amendment was not valid because his client had lacked the capacity to make such a modification.

Alzheimer’s Patients and Elder Financial Fraud
Alzheimer’s Disease typically leads to memory loss, disorientation, confusion, problems calculating figures, difficulties making plans, comprehension issues, judgment impairment, forgetfulness, and cognitive problems. Investors suffering from Alzheimer’s are easy targets for scammers seeking to take advantage of them.

At Shepherd Smith Edwards and Kantas, LTD LLP, our financial fraud lawyers are here to help senior investors and others recoup their losses.

Finra files complaint against broker for trying to inherit $1.8M from client with Alzheimer’s, InvestmentNews, June 12, 2015

Raymond James FA Hit With Elder-Abuse Complaint, Financial Advisor, June 16, 2015

Alzheimer’s And Financial Exploitation Of The Elderly

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