{"id":256633,"date":"2021-05-22T23:28:00","date_gmt":"2021-05-22T20:28:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/opinion-retirees-wiped-out-lose-millions-sec\/"},"modified":"2021-05-22T23:28:00","modified_gmt":"2021-05-22T20:28:00","slug":"opinion-retirees-wiped-out-lose-millions-sec","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/opinion-retirees-wiped-out-lose-millions-sec\/","title":{"rendered":"#\n  Opinion: Retirees wiped out, lose millions: SEC"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a38490cba5b6\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a38490cba5b6\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/opinion-retirees-wiped-out-lose-millions-sec\/#Brett_Arends\" >Brett Arends<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong>#<br \/>\n  Opinion: Retirees wiped out, lose millions: SEC<br \/>\n<\/strong>&#8221;<\/p>\n<h2 class=\"article__subhead\" itemprop=\"alternativeHeadline\">\n<\/h2>\n<p><\/p>\n<div class=\"column column--full article__content\">\n<div class=\"article__side\">\n<div class=\"container--sticky not-active\">\n<div id=\"cx-next\">\n              <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div id=\"js-article__body\" class=\"article__body article-wrap at16-col16 barrons-article-wrap\" itemprop=\"articleBody\" data-sbid=\"WP-MKTW-0000278274\">\n<div class=\"barrons-article-ad-wrapper\">\n<div data-track=\"barrons-article-ad-wrap\" class=\"barrons-article-ad sticky_item\">\n<div class=\"barrons-main-article-ad-target sticky_target body_ad\" aria-hidden=\"true\"><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>       When it comes to handling our money in retirement, there\u2019s probably one number to keep in mind above all others.<\/p>\n<p> That number? Zero.<\/p>\n<p>For example, it\u2019s the exact percentage of our savings we should be gambling on private companies, meaning those not traded on the stock market.<\/p>\n<div class=\"paywall\">\n       And it\u2019s the amount in round dollars that we should invest with charming, persuasive strangers peddling exotic investment schemes. And it\u2019s also the number of those strangers to whom we should give actual custody of our funds.<\/p>\n<p>Oh, yes. It\u2019s also the number of \u201clow-risk investments\u201d that will pay retirees (or anyone else, for that matter) 10% a year, or let alone per month.<\/p>\n<p>Which brings us to the case of investment adviser KNI in Houston, Texas, where the Securities and Exchange Commission reports that as many as 70 investors, most of them <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>arently retirees and near-retirees, have just lost millions of their hard-earned life savings. In many cases, says the SEC, the retirees have lost everything.<\/p>\n<p>A Texas widow lost her entire $30,000 retirement account. A Nevada individual lost his entire $92,000 retirement portfolio. A Kansas veteran and military professor, who was months away from retirement, lost almost all of his $320,000 retirement savings. An Alabama retiree lost $105,000, while the SEC mentions others who lost between $30,000 and $150,000 their retirement accounts.<\/p>\n<p>A retiree in Houston who had been seriously injured at work, and feared she could never work again, was seeking safety and income from her investments as a result. Instead, says the SEC, she lost her entire $75,000 retirement portfolio.<\/p>\n<p>Total losses are about $3.7 million.<\/p>\n<p>The Securities and Exchange has filed suit against KNI, which stood for Knight Nguyen Investments, Christopher Knight Lopez, his brother Jayson Lopez, and Forrest Andrew Jones, accusing them of multiple violations of federal securities laws, including antifraud provisions. The SEC says the violations range from misrepresenting risky investments as safe to manufacturing false financial statements and misappropriating the clients\u2019 money.<\/p>\n<div id=\"cx-membership-tile\"><\/div>\n<p>\u201cKNI largely targeted older and unsophisticated individuals who were trying to preserve or grow their retirement savings,\u201d the SEC<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.sec.gov\/litigation\/complaints\/2021\/comp25089.pdf\" class=\"icon none\"> reports<\/a>. \u201cTo lure these individuals to become clients, Chris Lopez and Forrest Jones falsely portrayed KNI as an established firm with a proven track record, telling prospective clients that KNI would only recommend or place clients in investments in companies with a proven history of financial earnings that were secured by real assets,\u201d it says. KNI operated from 2015, to 2018, it says.<\/p>\n<p>The allegations are as yet unproven. Leonard Meyer, attorney for Forrest Jones, tells MarketWatch: \u201cHe is not guilty of any of the charges brought against him.\u201d The other defendants could not be reached.<\/p>\n<p>Regardless of the legal ins and outs, the details of KNI\u2019s investments as laid out by the SEC should raise a forest of red flags for any retiree, near-retiree, or their family.<\/p>\n<p>According to the SEC, KNI clients were sold securities in at least five private companies involved in things like importing gold and diamonds, consulting, \u201cgraphic tools\u201d and <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/trip-and-travel\/\" data-internallinksmanager029f6b8e52c=\"10\" title=\"Trip &amp; Travel\" target=\"_blank\" rel=\"noopener\">travel<\/a> software. KNI told clients its investment strategy \u201callows historic gains of +10% p.a. annual without the risk normally associated with them.\u201d One of the companies was allegedly based in the Seychelles, the island chain off the east coast of Africa well known as a honeymoon destination, and was supposed to be selling gold to a refinery in Lebanon. Another company allegedly held patents for peptides\u2014short strings of amino acids\u2014that might cure cancer, among other applications. This company supposedly had a ton of cash held in a bank in London. Investments in these companies were wiped out.<\/p>\n<p>One of the investors, says the SEC, was told his retirement funds would be safe in the stock of a software company \u201cand the investment would produce a monthly return of 11.25%.\u201d<\/p>\n<p>Let\u2019s put aside the accusations of fraud and other malfeasance, and just look at this from the point of view of the people who have apparently lost some or all of their savings.<\/p>\n<p>Yes, sure, they were \u201cfinancially unsophisticated,\u201d according to the SEC.<\/p>\n<p>But it remains infuriating that we apparently don\u2019t teach everyone basic financial self-defense when they are still in school (along with all the other skills they will need to be an effective adult, and which we also don\u2019t teach). If we did, and the SEC\u2019s descriptions are accurate, these retirees would still have their money. So would millions of others, too. We live in a capitalist society. Not teaching people how to handle money is as crazy as not teaching them how to drive.<\/p>\n<p>And by the time most of us reach our senior years we are\u00a0probably going to be especially vulnerable to financial mistakes. We typically have more assets when we\u2019re old, no matter what our <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">social<\/a> and economic profile, we\u2019re likely to have more money by the time we\u2019re 65 than we did when we were 20. If we\u2019re very elderly our cognitive skills may be eroding. Once we\u2019re retired we\u2019re more likely to get out of touch with the work and professional environments. And in old age, many become isolated and lonely.<\/p>\n<p>Widows in particular can be easy prey for charming, persuasive middle-aged men. I am not commenting specifically on this case, but in <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">general<\/a> whenever I hear about widows getting fleeced I immediately think of Joseph Cotton, the charming Uncle Charlie in Hitchcock\u2019s brilliant 1940s thriller \u201cShadow Of A Doubt.\u201d <\/p>\n<p>No retiree or near-retiree should have been investing in any of these ventures. I\u2019m still working and I wouldn\u2019t have touched any of them with a 10-foot pole, even if I had money to burn and even if I didn\u2019t already know that they would collapse.<\/p>\n<p>There are no \u201crisk free\u201d returns of 10% a year (let alone 11.25% a month). None. Right now U.S. Treasury bonds pay a maximum of 2.4% interest, while the bonds issued by solid, low-risk, blue-chip \u201cinvestment grade\u201d U.S. companies\u2014like, say, Verizon<br \/>\n        VZ,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/204980236\/composite\" class=\"positive\">+0.21%<\/bg-quote><span>,<\/span><br \/>\n       Apple<br \/>\n        AAPL,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/202934861\/composite\" class=\"negative\">-1.48%<\/bg-quote><br \/>\n       and Bank of America<br \/>\n        BAC,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/200894270\/composite\" class=\"positive\">+1.27%<\/bg-quote><br \/>\n      \u2014yield about 3.7%. Higher-risk, \u201chigh yield\u201d company bonds are paying no more than 4.4%.<\/p>\n<p>Incidentally, anyone who has miraculously discovered a way of earning 10% a year \u201crisk free\u201d would not be wasting time offering it to you. They\u2019d be keeping it to themselves.<\/p>\n<p>And why even invest in private companies at all? There are over 3,500 companies listed on U.S. stock exchanges, from household names to the obscure, covering every type of venture and operation. Their accounts are generally subject to intense scrutiny, both by the legions of investors and by the U.S. government. They publish regular audited accounts and business updates that are freely available online. We don\u2019t need to take anyone\u2019s assurances about their investment performance because we can check out their stock chart and dividend record online (including here at MarketWatch), absolutely free of charge.<\/p>\n<p>And then there\u2019s the matter of custody: Who actually has possession of our funds. Why would I ever entrust my money to a stranger, or an unknown company, no matter how good the pitch? Big, well-known investment companies are typically backed by large amounts of capital. More important, they also effectively insure our accounts up to $500,000 against fraud or company failure (though not against our actual shares or bonds going down in price) through the Securities Investor Protection Corporation, <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.investor.gov\/introduction-investing\/investing-basics\/glossary\/securities-investor-protection-corporation-sipc\" class=\"icon none\">which the U.S. government explains here<\/a>. <\/p>\n<p>Watching people lose their life savings through investments is a tragedy, especially when they are too old to recover. Fraud or not, so much of it is easily avoidable.<\/p><\/div>\n<\/div><\/div>\n<p><\/p>\n<div class=\"byline article__byline\">\n<p>      <span>By<\/span><\/p>\n<div class=\"author  hasMenu\" data-scrim='{\"type\":\"author\",\"header\":\"Brett Arends\",\"subhead\":\"The Wall Street Journal\",\"list\":[]}' itemscope itemprop=\"author\" itemtype=\"http:\/\/schema.org\/Person\">\n<h4 itemprop=\"name\"><span class=\"ez-toc-section\" id=\"Brett_Arends\"><\/span>Brett Arends<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/p><\/div>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"http:\/\/www.marketwatch.com\/news\/story.asp?guid=%7B20C05575-04D4-B545-743F-02805625F7CF%7D&#038;siteid=rss&#038;rss=1\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# Opinion: Retirees wiped out, lose millions: SEC &#8221; When it comes to handling our money in retirement, there\u2019s probably one number to keep in mind above all others. That number? Zero. For example, it\u2019s the exact percentage of our savings we should be gambling on private companies, meaning those not traded on the stock&#8230;<\/p>\n","protected":false},"author":1,"featured_media":256634,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[],"class_list":["post-256633","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/256633","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=256633"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/256633\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/256634"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=256633"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=256633"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=256633"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}