Wharton Pension Research Council Working Papers

Document Type

Working Paper

Date of this Version



Investment fraud is a significant problem in America. Estimates vary, but a conservative one is that about 10 percent of the investors will be victimized by investment fraud at some point in their lives. Further, many baby boomers are entering retirement with significant assets, and enforcement actions by financial regulators indicate that investors can be vulnerable to fraud at key ‘wealth events’ in their lives, such as when they face a decision about what to do with money arising from the sale of a house, an inheritance, or an IRA rollover. Protecting these assets—for baby boomers and younger generations who face key wealth events—will be important to ensure the financial well-being and retirement security of millions of Americans. This chapter reviews the dynamics of investment fraud victimization, explains how fraudsters use social influence tactics to defraud their victims, and describes current investor protection efforts.


The published version of this Working Paper may be found in the 2017 publication: Financial Decision Making and Retirement Security in an Aging World.


Investment fraud, financial fraud, social influence, demographics and fraud, psychographics and fraud, investment fraud solicitations, fraud victimization rates, investor protection

Working Paper Number


Copyright/Permission Statement

All findings, interpretations, and conclusions of this paper represent the views of the author(s) and not those of the Wharton School or the Pension Research Council. © 2016 Pension Research Council of the Wharton School of the University of Pennsylvania. All rights reserved.

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Economics Commons



Date Posted: 06 March 2019