FINRA Warns Investors and Retirees

FINRA warned investors and retirees about investment advisors who are taking advantage of temporary changes to withdrawal rules from retirement accounts to encourage clients to invest in risky products that often charge high fees. The CARES Act of 2020, passed in response to the COVID-19 pandemic, allows certain qualified retirement investors to withdraw funds from retirement accounts, such as 401(k)s and IRAs, without having the withdrawn amounts treated as income for tax purposes. The CARES Act also waives an early withdrawal penalty for coronavirus related distributions during 2020. These and other provisions in the CARES Act were intended to provide temporary relief for retirement investors facing financial emergencies, but who also expect to repay money withdrawn from retirement accounts to avoid taxes and penalties.

Dishonest investment advisors, fraudsters, and others are taking advantage of the CARES Act to promote high-risk, high-fee investments. Some of these investments are not temporary or otherwise intended to be repaid to the retirement account. These scams not only put investors at risks of losing money but also expose them to avoidable income taxes and penalties arising from retirement account withdrawals. To learn more, visit FINRA’s website at: https://www.finra.org/investors/insights/covid-19-early-withdrawals

If you suspect that your investment advisor or financial professional has recommended or caused your savings or retirement accounts to be invested in risky or high-fee products, please contact Cody Berne or Keil Mueller at Stoll Berne for a free consultation.


This blog is intended to provide information to the general public and to practitioners about developments that may impact Oregon Investments.

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Cody Berne

Cody Berne is an attorney at Stoll Berne in Portland. Cody’s practice focuses on representing investors who lost money because of fraud and other misconduct, class actions, and business litigation. He is a member of the Public Investors Advocate Bar Association and the Oregon Trial Lawyers Association.

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Legal Disclaimer

The information contained in this blog does not constitute legal advice, and does not create an attorney-client relationship. We make no claims, promises or guarantees about the accuracy, completeness, or adequacy of the information contained in or linked to this blog.