Coined by Robert Heinlein in the classic 1966 science fiction novel The Moon is a Harsh Mistress, the acronym stands for an aphorism we all should remember: "There ain't no such thing as a free lunch."
This is exactly what the Securities and Exchange Commission found in a yearlong investigation of investment seminars aimed at senior citizens. It focused on 110 firms in seven states with the largest number of retirees: Florida, California, Texas, Arizona, North Carolina, Alabama and South Carolina.
In every case, the SEC found that investment firms were lying when they advertised a "free lunch educational workshop where nothing will be sold." After enticing the retirees into the "free" lunch or dinner seminars held at "upscale hotels, restaurants, retirement communities and golf courses," slick salesmen would descend on the attendees with pitches rife with "exaggerated and misleading" claims.
In more than a third of the cases the recommendations were found to be unsuitable or fraudulent. In almost two-thirds of the cases, the firms demonstrated weak or nonexistent supervision of what their salesmen were saying or doing.
"These findings are a wake-up call for securities regulators, the financial services industry and especially older investors," SEC Chairman Christopher Cox said at the SEC's recent Seniors Summit in Washington. Cox said regulators intend to put a stop to this abuse and promised swift punishment for the crooks.
Researchers reported at the summit that this was not an isolated problem. Eight of 10 senior citizens in the country have been targeted with these tactics. As soon as they get on a senior mailing list, most are bombarded with enticements to these scams through the U.S. mail.
So, remember: TANSTAAFL. Repeat it to yourself every time someone offers you something for nothing. It will save you money.