Opinion: Retirees wiped out, lose millions: SEC
Last Updated: May 22, 2021 at 4:28 p.m. ET
First Published: May 21, 2021 at 10:48 a.m. ET
Regardless of the legal ins and outs, the details of KNI’s investments as laid out by the SEC should raise a forest of red flags for any retiree, near-retiree, or their family.
According to the SEC, KNI clients were sold securities in at least five private companies involved in things like importing gold and diamonds, consulting, “graphic tools” and travel software. KNI told clients its investment strategy “allows historic gains of +10% p.a. annual without the risk normally associated with them.” 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—short strings of amino acids—that 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.
One of the investors, says the SEC, was told his retirement funds would be safe in the stock of a software company “and the investment would produce a monthly return of 11.25%.”
Let’s 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.
Yes, sure, they were “financially unsophisticated,” according to the SEC.
But it remains infuriating that we apparently don’t 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’t teach). If we did, and the SEC’s 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.