June 2017

Highlighting industry efforts to protect the nation's senior investors


Hiding in Plain Sight: Age-Associated Cognitive Decline
Think about the times when you’ve commented on the superior mental feats of an older relative. Or perhaps you’ve heard another person describe a senior citizen as “just as sharp as ever.” How accurate are these observations? What can hide cognitive declines, putting older adults at risk of financial exploitation? There is substantial research documenting age-related cognitive declines. Although there are differences in ability levels and the rates at which individuals decline, everyone is expected to show some losses compared to their younger selves in fluid cognitive abilities.

Continue reading this post by Dr. Angela Gutchess, Ph.D., on SIFMA’s Pennsylvania + Wall.

FA Viewpoint: Preventing Exploitation of Our Senior Clients
Financial advisors face many challenges, most routine, but a few that can be disturbing. High on this list is the growing financial exploitation of senior investors. I have seen it up-close in my practice, more than once, and I fear we will witness it many more times - unless we act.

Continue reading this post by Amy Daniels, Financial Advisor, Edward Jones, on SIFMA’s Pennsylvania + Wall.

Member Firm Case Study: Potential Cognitive Decline
On May 1st, our broker received a call from Sally Spouse, the wife of Stanley Spouse. Sally and Stan are both in their 70s, retired, and they rely on Stan’s retirement account (not a joint account) through the brokerage to pay their expenses. The retirement account is the only account the couple holds at the firm. On the phone call, Sally told the broker that she was concerned because her husband had been exhibiting strange behaviors, including being extremely forgetful, confused and acting out of character.

Continue reading this true story of a member firm’s efforts to protect its client(s) from exploitation on SIFMA’s Senior Investors Resource Center.  All names, dates and locations have been changed.


Federal Update

SIFMA Seminar Announcement: Preparing for FINRA’s New Senior Investor Protection Rules, a deep dive into rules 2165 and 4512.  With the February implementation deadline fast approaching, join SIFMA for a Senior Investor Protection Seminar to take a deep dive into FINRA rules 2165 and 4512 on September 13, 2017. Industry experts and regulators will gather to review these new rules, which will provide firms with a safe harbor for temporarily holding suspect disbursements and requires firms to attempt to collect trusted contact information from all their clients. During this half-day program, participants will have the opportunity to analyze the new rules and discuss the various implementation strategies of firms of all sizes and business models.

Elder Justice Caucus.  Representatives King (NY) and Bonamici (OR) announced the establishment of a bipartisan Elder Justice Caucus and the introduction of legislation to reauthorize the Elder Justice Act of 2009.


State Update

AlabamaSB 274, to establish the Elder Abuse Protection Order and Enforcement Act, was signed by the Gov. May 9 as Ch. 284.

AlaskaHB 170, a securities omnibus bill that includes Report & Hold provisions, was amended and passed the House Apr. 17.  The bill was read in Senate Labor & Commerce May 1.

ArkansasHB 1800 will make various changes to existing state securities laws; §21 includes the unamended NASAA Model Report & Hold provisions. The bill was signed by the Gov. and is now Act 668.  The law will become effective August 1.

CaliforniaAB 611, which passed the Assembly on May 15 and was referred to 2 Senate committees May 24, would authorize a mandated reporter of suspected financial abuse to not honor any POA if he or she makes or has knowledge of someone else making a report to APS or law enforcement of suspected financial abuse. 

CaliforniaAB 728, which would expand the list of offenses that make a defendant ineligible for expungement relief to include elder abuse, was amended and re-referred to Health Apr. 24.

ColoradoHB 1253, a Report & Hold bill with many beneficial features on which SIFMA testified, was signed by the Gov. Jun. 2.

DelawareHB 162 would move the existing Report & Hold law from the APS statute to the securities statutes.  The introduced bill is based on the NASAA model, but amendments harmonizing the bill with the existing DE law and FINRA rules are anticipated.  This bill was assigned to Judiciary May 9.

FloridaHB 981, to create a public records exemption for certain personal identifying info, personal health and financial records, and photographs and video recordings held by the Dept. of Elderly Affairs, passed both houses as of May 3.

HawaiiHB 432, to make financial exploitation of an elder by a caregiver a felony, passed the House Mar. 7 and passed out of 2 Senate Committees on Mar. 20, but died at the end of session. 

IndianaHB 1526, the Securities Commissioner’s bill to add IAs to the state Report & Hold law, was signed by the Gov. Apr. 24 as Public Law 158.  It has a July 1 effective date. 

KentuckyHB 83, a Report & Hold bill based on the NASAA Model, died at the end of session.

Maryland.  The Gov.’s statement of bills that will go into law without his signature included HB 1149 / SB 951, providing vulnerable adult investor protections.  The bill is law as of May 27 (effective Oct. 1, 2017) and contains Report & Hold language on which SIFMA successfully worked with the Securities Commissioner toward harmonization with the FINRA rule. 

MichiganSB 345, intro’d May 2, would protect BD/IA record-sharing to APS and law enforcement and require the securities administrator to make available web-based training materials on prevention and detection of financial exploitation of financially endangered adults.

MichiganSB 346 would impose mandatory reporting, establish a Report & Hold process, and only take effect unless SB 345 is enacted into law.

MinnesotaSF 919, a NASAA Model Report & Hold bill, failed to meet committee deadline.

MississippiSB 2911 is a Report & Hold bill that was approved by the Gov. Mar. 27.  The bill included SIFMA’s recommendations

MissouriSB 103, which would have required Dept. of Health & Senior Services employees investigating elder abuse to provide an alleged perpetrator present during an initial visit with info on the investigation process, passed out of committee but died in the Senate upon adjournment. 

MontanaHB 24, a Report & Hold that was originally based on the NASAA model, but was amended into a rather unique law, was signed by the Gov. Mar. 22.  It had an immediate effective date.

MontanaHB 139, which would add IAs, financial planners, and financial brokers to persons required to report abuse, neglect or exploitation of vulnerable adults, died Mar. 31.

NevadaSB 360, to revise provisions on the protection of older and vulnerable persons and persons in need of a guardian, including increasing criminal penalties, was approved by the Gov. Jun. 5 as Ch. 387. 

New MexicoHB 326, a Report & Hold bill which originally mirrored the NASAA model but was substantially amended to include many of SIFMA’s recommendations, was signed by the Gov. Apr. 7.

New MexicoHB 146, initially to make firms criminally liable for transferring property/money of a vulnerable adult if the adult didn’t receive equivalent value, was amended to focus on those transferring funds with intent to defraud.  The bill was withdrawn from committee Mar. 15 and died at session end.

New York StateA. 6395, which was referred to Aging Mar. 6, would require the DFS superintendent develop guidelines related to reporting suspected financial exploitation and provide that a 3rd party who reports suspected financial abuse would have immunity from any civil or criminal liability.

New York StateS. 4923, which would enact the Senior Anti-Violence and Enforcement Act (SAVE) and establish a central registry for access to reports of maltreatment of seniors, was referred to Aging Mar. 3.

North DakotaSB 2322, a Report & Hold bill with several changes from the NASAA Model, including coverage for suspicious transactions, was signed by the Gov. Apr. 10.

OhioSB 158, which would impose a mandatory reporting requirement and fine and require restitution from offenders found guilty of certain fraud-related crimes against the elderly, was intro’d May 25. 

OregonSB 95, originally a NASAA Model Report & Hold bill now with several SIFMA-requested changes, passed the Senate as amended and was amended again in House Judiciary Jun. 6.

OregonHB 2622, a voluntary, bank-side version of Report & Hold that permits refusal of suspicious transactions and other requests, passed both houses as of Jun. 5.  

TennesseeSB 1192, which will make securities changes and add very good voluntary Report & Hold senior investor protection provisions, was signed by the Gov. May 18 as Ch. 424.  SIFMA supported the bill.

TexasHB 3921, a strong Report & Hold bill that SIFMA supported which also extends protection to transactions, was signed by the Gov. Jun. 1.

VermontSB 56, which would enhance penalties for insurance or securities violations involving a vulnerable adult, passed both houses as amended May 2.

Washington StateHB 1402, to prevent a guardian from restricting the communication, visitation, interaction, or association of an incapacitated person, was signed by the Gov. May 10 as Ch. 268.

Washington StateHB 1153, to create the crimes of ‘theft from a vulnerable adult’ in the 1st and 2nd degree, was signed by the Gov. May 10 as Ch. 266.

Washington StateSB 5349, to require the state to establish an elder justice center demonstration program, was reintro’d May 23.

Report & Hold Laws.  With 9 enactments this year, the total number of states with Report & Hold laws has grown to 15 (Alabama, Arkansas, Colorado, Delaware, Indiana, Louisiana, Maryland, Mississippi, Missouri, Montana, New Mexico, North Dakota, Tennessee, Texas, and Washington State).  Vermont also has a more limited Report & Hold regulation.  The laws in Washington State, Missouri, Delaware, Indiana, Alabama, Louisiana, Montana and Tennessee are currently effective.  Colorado, Mississippi, and New Mexico will be effective July 1; North Dakota and Arkansas August 1; Texas September 1; Maryland October 1.  


Upcoming Events

Register Today: Senior Investor Protection Denver Regional Workshop.  Join SIFMA on July 27 in Denver for our 3rd Senior Investor Protection Regional Workshop! Following the success of our first two workshop events, this interactive program provides attendees with the opportunity to take a deeper-dive into senior investor protection efforts, learn how to identify decline and exploitation, and learn practical ways to establish an effective client protection program.


Mark Your Calendar: Preparing for FINRA’s New Senior Investor Protection Rules: A deep dive into Rules 2165 and 4512.  Join SIFMA on September 13 for a half-day event as the industry prepares for the impending implementation of FINRA’s new Senior Investor Protection Rules.  Industry experts and regulators will gather to review these new rules, which will provide firms with a safe harbor for temporarily holding suspect disbursements and requires firms to attempt to collect trusted contact information from all their clients.  During this program, participants will have the opportunity to analyze the new rules and discuss the various implementation strategies of firms of all sizes and business models.


World Elder Abuse Awareness Day. Registration is now open for NAPSA's Third Global Summit on World Elder Abuse Awareness Day on Thursday, June 15, 2017 in Washington, DC. SIFMA's Lisa Bleier will be speaking on a panel about finding the right balance between autonomy and protection.


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