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States Enact Good Samaritan Broker Laws

On January 22, 2016, the members of the North American Securities Administrators Association (NASAA) released the Senior Model Act.  It was developed and approved to serve as a model statute for states to adopt to target financial exploitation of seniors and to shield from liability brokers and brokerage firms who acted to assist those seniors. The Senior Model Act comports with a multitude of legislation and regulatory protection for seniors. Broadly stated, the Senior Model Act proposes language for legislation that would require “qualified individuals” such as broker-dealers and investment advisers, and those who work in a supervisory or legal capacity for them, to report any suspicions of financial elder abuse. The Senior Model Act proposes the protection of “eligible adults,” defined as those over the age of 65.

Key Provisions of the Senior Model Act:

  • Mandatory Reporting. Qualified individuals who reasonably believe a senior has been or is targeted to be financially exploited must report this promptly to their state’s security regulator and state’s adult protective services.
  • Notification to Third Parties. A qualified individual may only report this to a third party if the senior has designated one. A qualified individual cannot report it to a person who is suspected of committing the financial abuse.
  • Delayed Disbursements. Broker-dealers and investment advisers can delay disbursements from the senior’s account for up to 15 days. To do so, they must (a) notify people authorized to transact business on the senior’s account, (b) notify the state securities regulator and adult protective services, and (c) undertake an internal review of the suspected exploitation. The disbursements may be further delayed by the qualified individual for an additional 10 business days or by court order.
  • Immunity. Qualified individuals will have immunity from civil or administrative liability for actions taken pursuant to the Senior Model Act.
  • Providing Records. Broker-dealers and investment advisers would be required to comply with record requests from adult protective services or law enforcement when financial exploitation is suspected.

Twenty-eight states have passed laws that are substantially similar or identical to the Senior Model Act passed by the North American Securities Administrators Association. Click here for a state survey:

  • The effective date of the law in each state
  • Which key provisions the state has adopted
  • Any notable deviations or notes of interest.

Further Protection for Good Samaritan Brokers: States and FINRA Continue the Push to Protect Senior Investors by Protecting Brokers Who Do the Right Thing

Following the passage of last year’s federal Senior Safe Act, several states moved to beef up protections for senior investors by permitting brokers to act without liability.
Continue reading “Further Protection for Good Samaritan Brokers: States and FINRA Continue the Push to Protect Senior Investors by Protecting Brokers Who Do the Right Thing”

Make Senior Investing Safe Again? President Trump Signs Into Law the Senior Safe Act in an Attempt to Curb Financial Abuse of Seniors

On May 24, 2018, President Trump signed into law the Senior Safe Act,  which is aimed at curbing elder financial abuse. The Senior Safe Act is the latest effort to protect senior investors, as both FINRA and the SEC included protecting senior investors among their 2018 priorities. This blog has previously covered, at length, the SEC and FINRA 2018 exam priorities. Elder protection was also one of the SEC’s 2017 priorities and has been a FINRA priority since 2016.

Continue reading “Make Senior Investing Safe Again? President Trump Signs Into Law the Senior Safe Act in an Attempt to Curb Financial Abuse of Seniors”