The loss in question was the result of actions by a trader in London who guessed wrong regarding complicated trades that were tied to the values of corporate bonds. The mistake then caused massive losses in JP Morgan’s derivative positions.

JP Morgan CEO Jamie Dimon called the trades “flawed, complex, poorly reviewed, poorly executed and poorly monitored,” adding that mistake should never have happened.

But happen it did, and shareholders are now paying the price. According to Reuters, JP Morgan has lost $15 billion in market value since announcing the $2 billion loss. Meanwhile, Standard & Poor’s revised its outlook on the bank from stable to negative.

Real estate investment trusts are designed to pool the capital of numerous investors together to buy a portfolio of properties – including office buildings, hotels and apartments – that a typical investor might not otherwise be able to purchase individually. There are two types of public REITs: Those that trade on a national securities exchange and those that do not. The latter is a non-traded REIT.

The lack of a public trading market creates illiquidity and valuation complexities. In addition, a number of factors affect the valuation of non-traded REITs, including the portfolio of real estate assets owned, strength of the trust’s balance sheet, overhead expenses and cost of capital.

In recent months, the valuation of non-traded REITs has become a topic of concern among non-traded REIT investors. As reported in an April 24 article by the Wall Street Journal, this very issue has become a reality for investors in Retail Properties of America, also known as Inland Western REIT. In April, the non-traded REIT went public, with an initial public offering of $3.20 before a reverse stock split. Nearly one year ago, shares of the REIT were valued at nearly $7.

The scenario is far from isolated. In 2006, another non-traded REIT, KBS Real Estate Investment Trust 1, showed an original price per share of $10. Its current valuation is $5.16.

Also this year, Cornerstone Core Properties REIT disclosed in a regulatory filing with the Securities and Exchange Commission (SEC) that the share price of its REIT, which was sold to investors at $8 a share in 2008, actually is now valued at $2.09.

As their name implies, non-traded REITs are not publicly traded investments like stocks. Non-traded REITs also have limited and lengthy redemption periods, along with exceptionally high commissions and other upfront fees and charges. Perhaps most unnerving to investors is the fact that the method for determining the share value of a non-traded REIT can be across the board and vary widely.

For instance, some REIT sponsors use third-party appraisers or investment banks to determine current property value; others rely on their own management. With either method, the valuation can oftentimes be a far cry from the true value of the investment.

Case in point: The Cornerstone Core Properties REIT disclosed in a regulatory filing earlier this year with the Securities and Exchange Commission (SEC) that its stock – which was originally sold to investors at $8 a share in 2008 – is actually valued at $2.09. Until 2012, however, Cornerstone has consistently noted in its regulatory filings the initial offering price, with no new updates.

As reported April 24 by the Wall Street Journal, Cornerstone CEO Terry Roussel commented on the matter in a letter sent to shareholders in March in which he stated that the value of the stock had to be reduced based on falling values of the industrial parks that the REIT previously purchased during the height of the market.

To no surprise, the response has not gone over well with investors. In turn, many are taking their dissatisfaction and filing grievances against the investment advisers who sold them non-traded REIT investments. In 2011, the Financial Industry Regulatory Authority (FINRA) had received 54% more complaints over non-traded REITs than it did two years ago.

Last year, both the SEC and FINRA began taking a closer look at non-traded REITs. Among other things, the agencies called upon sponsoring companies to provide better disclosures on the way shares are valued and any potential conflict of interests with third-party advisers.

For some investors, however, the new scrutiny is too little, too late. As reported in the Wall Street Journal article, Robert Block, a 74-year-old retiree living in Cape Coral, Fla., invested $412,000 in four non-traded REITs from 2006 to 2008 because his investment adviser told him the dividends were attractive and the REITs were “about as safe as anything you could get.”

The broker’s advice didn’t pan out. As of the first quarter of 2012, Block’s $400,000 investment was valued at about $300,000 based on REIT share valuations.

“I needed income that I could count on and wasn’t risky,” Block said the article.

Non-traded REITs enable retail investors to purchase shares in certain real estate projects, including shopping centers and large hotels.  There are several risks inherent with non-traded REITs, from lack of liquidity to inaccurate valuations of shares.

In addition, non-traded REITs typically come with hefty fees. Brokers who market and sell non-traded REITs earn up to 15% in commissions. In some cases, the lure of these high commissions have caused several brokers and financial advisors to recommend non-traded REITs to their clients when in fact the investments were entirely unsuitable for their particular risk profile.

Recent market changes have caused a number of problems in the non-traded REIT industry, including suspension of buyback programs, lower share valuations, and the elimination of dividends for investors.

Investors in Inland Western Real Estate Investment Trust know these problems first hand. Earlier this month, Inland Western was transitioned from a non-traded REIT to a publicly traded company, Retail Properties of America. Following the IPO in April 2012, Retail Properties was offered at $8, far below the expected share price of $10 to $12. Moreover, the $8 share price was actually the result of a reverse stock split. That means the true value of the investment is approximately $3.20.

For investors who originally purchased the REIT at $10, the new reality is a bitter pill to swallow.

The film includes former child actor Mickey Rooney, 91, who reveals details of his own experiences with financial fraud at the hands of a nephew. One of the film’s producers, Pamela Glasner, recalls how her father – a veteran with dementia – was persuaded by a complete stranger to sign over power of attorney. The perpetrator then took her father’s savings, his Florida home and his personal belongings.

A study by the MetLife Mature Market Institute says that 20% of Americans over the age of 65 have already been victims of financial fraud, and it costs these victims more than $3 billion a year in losses. The figure and the number of victims are likely much higher, however, because many elder abuse crimes are never reported to authorities.

Another estimate on elder financial fraud by Consumer Action, a consumer education and advocacy group, shows that while seniors 60 and older make up 15 percent of the U.S. population, they account for roughly 40 percent of fraud victims.

Sometimes elder financial fraud is perpetrated by strangers, but people in a position of trust – including family members, caregivers, and friends – also are the culprits in many cases.

Aging experts contend that seniors are especially vulnerable to financial fraud because they tend to be home more often, are typically alone and often isolated from their family.  Technology has only made elder financial fraud easier, allowing criminals to target seniors using Internet mapping and personal identification tools.

On April 4, 2012, the Commodity Futures Trading Commission (CFTC) filed a civil case against JPMorgan, making it the first federal enforcement case tied to Lehman’s demise. As reported April 4 by the New York Times, JP Morgan agreed to pay a fine of some $20 million to settle the case.

The trading commission accused JPMorgan of unlawfully handling customer segregated funds and overextending credit to Lehman for roughly two years leading up to its bankruptcy. JPMorgan extended the credit using an inaccurate evaluation of Lehman’s worth, counting money of Lehman’s customers as belonging to the firm. Under federal law, firms are not allowed to use customer money to secure or extend credit.

The theme of customer money also is at the center of the MF Global bankruptcy. MF Global Holdings Ltd., the broker’s parent company, filed for bankruptcy protection on Oct. 31, 2011.  Later, it was revealed that as much as $1.6 billion was missing in client money and that the company’s leverage ratio was 38-to-1.

JPMorgan also was involved in the final days of MF Global. Unlike MF Global, however, customer money never went missing from Lehman Brothers.

In the case of MF Global, JPMorgan received money belonging to the brokerage firm’s customers. The missing customer money is now the subject of a federal investigation.

That’s because the JOBS Act promotes a technique called “crowd funding,” whereby entrepreneurs are allowed to raise up to $1 million online from individual investors – and they can do so with only the most minimal financial disclosures. In other words, if a company touts questionable financial metrics as a way to enhance the appearance of its fiscal health, investors may never learn the truth until it’s too late.

In times of an unsettled economy, investors are easily drawn to financial opportunities that promise a fast and hefty return on their investment. The JOBS Act “dismantles some of the most basic protections for the most susceptible investors apt to be drawn into get-rich-quick scams and too-good-to-be-true investment opportunities,” says the New York Times story.

As reported by Bloomberg, investors who bought the Credit Suisse ETN lost more than $253 million during its recent freefall.

Exchange-traded notes are some of Wall Street’s most complex products. ETNs issue unsecured securities that aim to deliver the return of an index. The issuer, usually a financial institution, uses derivatives linked to that index to cover obligations to shareholders. If the issuer is unable to repay the notes, investors lose their money.

Issuers also can decide to stop creating or redeeming shares, thereby unhinging the ETN from the security or index it was supposed to track.

“In short, an exchange-traded note can be seen as a total return swap, sold to retail investors, that lacks all of the regulatory innovations that have developed over the past few years,” said a March 29 article by the New York Times.

The Financial Industry Regulatory Authority (FINRA) is now investigating how firms market exchange-traded notes.

Financial fraud is far from an anonymous crime. Oftentimes, the perpetrators are the people most familiar to their victims.  According to a 2011 study by MetLife, more than 1 million older Americans lose nearly $3 billion annually as a result of financial fraud. Some 55% of financial abuse in the United States is committed by family members, caregivers and friends, says the MetLife study.

The financial abuse itself can take many forms, including outright theft or forgery to rerouting assets without a victim’s knowledge or making unauthorized transactions in a victim’s brokerage account.

In Freeney’s case, the people behind the alleged fraud were his financial advisors and a business manager. The individuals, Eva D. Weinberg and Michael A. Stern, now face federal charges after allegedly embezzling some $2.5 million from Freeney.

Financial abusers depend on the silence of their victims to run their con. If you suspect someone may be a victim of financial fraud or abuse, contact local authorities immediately.

Another source of help is the Eldercare Locator, a program of the U.S. Department of Health and Human Services that provides individuals with information on support services in their communities.

Reid has filed a lawsuit in an attempt to recover the $2.5 million. It also is in the processing of cutting ties with Oxford, says Mark Maddox of Maddox, Hargett & Caruso, P.C., the firm representing Reid Hospital & Health Care Services.

As reported March 26 by the Indianapolis Business Journal, Reid initially instructed an investment advisor at Oxford to move forth with its request to sell securities investments on Aug. 1, 2011. The request, however, wasn’t actually fulfilled until Aug. 12. Had the sale been made on the date that Reid instructed, the investments would have been spared the financial beating they took following an Aug. 5 announcement by Standard & Poor’s in which the United States lost its AAA credit rating.

Based in Carmel, Indiana, Oxford Financial is an investment advisory business. Oxford advisors don’t actually execute trades but rather work with broker/dealers to perform a client’s transactions. At the same, however, investment advisors are required to uphold certain fiduciary duties just like broker/dealers – and that includes meeting what the Securities and Exchange Commission (SEC) says is an obligation to obtain “best execution of their clients’ transactions.”