TDCI Securities Division Highlights Role in Punishment of Former Franklin Financial Executive Fined, Sentenced for Stealing from Elderly ClientsCaretakers of Elderly Tennesseans Urged To Learn Red Flags of Elderly Financial Abuse
NASHVILLE – The Tennessee Department of Commerce & Insurance’s (TDCI) Securities Division highlights recent disciplinary actions taken by the agency related to a former Franklin-based investment executive who was recently sentenced to federal prison for stealing from elderly clients.
Fredrick M. Stow, 66, of Franklin, Tennessee, was sentenced in U.S. District Court on May 13, 2021 to five years in prison for stealing $933,500 from two elderly clients. In a separate but related action from 2020, TDCI demonstrated that Stow violated state law by stealing from his client’s accounts a total of 74 times. As part of his punishment, Stow was ordered by an Administrative Law Judge to pay a total civil penalty of $125,800 in addition to the revocation of his insurance producer and securities broker-dealer agent licenses.
“This individual’s punishment should serve notice to others like him that our Department will work tirelessly with federal and local law enforcement agencies to pursue action against those who would seek to exploit and financially harm any elderly individual,” said TDCI Assistant Commissioner Elizabeth Bowling. “Our senior citizens are a valuable and important segment of Tennessee’s population who deserve to be treated with dignity in their golden years. I encourage all families and caretakers to learn the red flags of suspected elder financial abuse and report them to our team or to law enforcement.”
According to court records, beginning in 1982, Stow acted as the registered representative for three brokerage accounts owned by a client who was a retired airline pilot and WWII era veteran. Stow changed investment firms several times and the client elected to move his accounts with Stow each time, ultimately transferring his accounts to Raymond James when Stow joined the firm in 2013. Over time, Stow inserted himself into the financial affairs of this client and in the later years of the client’s life, he visited him at his home.
Relatives testified that the client died believing that his dwindling investment accounts were caused solely by stock market activity.
In October 2015, Stow began misappropriating funds from this client’s IRA account by forging wire transfer letters of authorization to permit transfers from the client’s IRA account to a SunTrust Bank account that Stow owned jointly with his wife. To accomplish the transfers, Stow sold securities in the client’s IRA account.
At the time of this client’s death at the age of 98 in March 2018, Stow had made 74 unauthorized transfers and had stolen more than $900,000 from him. Within weeks of this client’s death, Stow stole $32,000 from another elderly brokerage customer, by transferring money from the customer’s brokerage account to another SunTrust bank account that Stow owned.
In an effort to help raise awareness among Tennesseans about financial exploitation, TDCI shares the following warning signs of financial exploitation
- Significant withdrawals from the vulnerable adult’s accounts.
- Sudden changes in their financial circumstances.
- Valuable items or cash missing from their home.
- Increase in junk mail soliciting purchases or payments for sweepstakes money.
- Neglect of the victim, such as no food in the home and needed maintenance or repairs of the home are ignored.
Additionally, TDCI’s Securities Division reminds consumers about the Senior Financial Protection & Securities Modernization Act, enacted as Public Chapter No. 424, which aims to safeguard senior adults (age 65 or older), and others at increased risk of diminished capacity or other cognitive impairment, by providing the securities industry with greater tools to help detect and prevent financial exploitation.
Individuals with suspicions of possible senior investment fraud or financial exploitation should contact: Tennessee’s Securities Division by calling 615-741-5900 or visiting tn.gov/securities, local Adult Protective Services agencies, FINRA or the SEC.