WASHINGTON (Reuters) -- Forty investment firms across America's Sun Belt are under federal examination over so-called "free lunch" investment seminars that target elderly victims, authorities said Monday.

In six states with large retiree populations, the Securities and Exchange Commission is looking hard at seminars where seniors get a free meal and a hard sell for investments that can range from inappropriate to fraudulent.

"Regulators are now examining 40 firms and more firms have been identified for examinations," said Lori Richards, director of the SEC's Office of Compliance Inspections and Examinations at a conference on senior fraud. She did not name the firms.

At the conference, a study was released with a finding that surprised some officials - elderly victims of investment fraud seem to be more financially literate than non-victims.

The finding in the study sponsored by markets watchdog NASD led to suggestions that financial education needs to cover more than market mechanics and include teaching about scam tactics.

From verbal bullying to impersonating authority figures and playing on feelings of insecurity or greed, swindlers use a range of techniques to part seniors from their money.

"The reason people victimize seniors is because that's where the money is," said Linda Thomsen, director of the SEC's Division of Enforcement at the conference.

Nearly half of all investor complaints received by state securities regulators involve senior citizens and that figure looks sure to rise as baby boomers age, said the North American Securities Administrators Association.

Already in Florida, 75 percent of all investor complaints come from seniors, the association said in another study.

"Senior investment fraud is a serious and ongoing problem and we fear that it will only grow without targeted enforcement and enhanced investor education," said Wisconsin Securities Administrator Patricia Struck, the association's president.

Scams often perpetrated against the aged include affinity frauds, where the perpetrators prey on people with shared interests, such as church membership or a profession; and variable annuity sales that put seniors into unsuitable or costly investment products.

"Viatical" and "life settlement" scams are common. In these, seniors sell the death benefit of life insurance policies at a discount for cash. Then a broker sells shares to investors who are told they will get a proportionate share of the death benefit when the insured dies. These high-risk schemes often end up cheating investors, officials said.

Another common elderly scam, said the California Department of Corporations, are "CD+ bonus" deals. In these, promises of high returns and bonus payments on low-risk certificates of deposit are used to lure seniors who are then talked into buying some other form of investment.

Similar "bait and switch" schemes proliferate, as do charity scams that exploit the sympathy and generosity of seniors, often by linking a scam to a recent tragedy.

The 40 firms being examined by the SEC over "free lunch" programs are in Florida, California, Arizona, Texas, North Carolina and Alabama, said Richards.

The seminars are often held in local restaurants and hotels, promoted as being hosted by other seniors who may be familiar to local people and seem trustworthy. These pitchmen promote a wide range of products, suitable and otherwise.

"Some of the sales materials we're seeing in these seminars are loaded with exaggerated claims and gimmicks ... Some of these sales seminars seem to be completely unsupervised" by the sponsoring investment firms, Richards said.

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