ATTORNEY NEWSLETTER
FINRA Senior Exploitation Rules
Add Trusted Contact To Account
Placing A Hold On Account
The Financial Industry Regulatory Authority (FINRA) is a regulatory agency that has been increasingly focused on protecting older Americans from financial elder abuse from advisors and brokers. FINRA has a set of rules designed to protect seniors from financial exploitation by brokerage firms and other financial businesses regulated by FINRA. See, e.g., FINRA Rules 4512 (Customer Account Information) and Rule 2165 (Financial Exploitation of Specified Adults) and Regulatory Notice 17-11 (SEC Approval of Rules Relating to Financial Exploitation of Seniors). FINRA financial exploitation rules, discussed more fully below, are important but any senior victim of financial elder abuse has additional rights and remedies under State law which exceed any protections under FINRA, and elder counsel can help you pursue all those remedies, including awards of attorneys’ fees and expenses for bringing suit. Cal. Welf. & Inst. Code § 15657.5. Whenever a senior is victimized by financial elder abuse here in San Francisco or elsewhere in California, call Evans Law Firm, Inc. today at (415)441-8669. Our toll-free number is 1-888-50EVANS (888-503-8267).
Adding a Trusted Contact Person to Your Account
When you open a brokerage account or update information related to an existing account, be sure to add contact information for a designated trusted contact person for the account. By choosing to provide this information, you are authorizing the firm to contact someone you trust and to disclose information about your account only in certain circumstances, including to address possible financial exploitation by someone and to confirm the specifics of your health status or the identity of any legal guardian, executor, trustee or holder of a power of attorney. By added a trusted contact, your brokerage firm is on notice to contact that individual if they suspect you are being exploited and unable (or unaware) of the misconduct.
Placing Holds When Exploitation Is Suspected
Additionally, brokerage firms now are permitted to place a temporary hold on a securities transaction, as well as on disbursements of funds or securities from an account, when there is reason to believe financial exploitation might be occurring. The rule applies to accounts belonging to investors age 65 and older and to those with mental or physical impairments that the firm reasonably believes make it difficult for these investors to protect their own financial interests.
If a firm suspects financial exploitation, it may put a hold on such transactions or disbursements from your account for up to 15 business days. The firm must conduct an investigation and attempt to notify you and your trusted contact. If the firm gathers information that supports its suspicion of financial exploitation, it may continue the hold on the transactions or disbursements for another 10 business days. The firm may extend the temporary hold for an additional 30 business days, if it has reported the matter to a state authority, to allow time for a thorough investigation.
Contact Us
These FINRA Rules provide important protections but they do not substitute for you monitoring a senior loved one’s account and seeking counsel’s help if you suspect something is wrong. Financial firms are slow to act and cannot pursue all the relief a financial elder abuse victim is entitled to. Ingrid M. Evans and Evans Law Firm, Inc. represent seniors in San Francisco and throughout California who are victims of any kind of elder abuse, including financial elder abuse. We can be reached at (415) 441-8669, or by email at info@evanslaw.com. Our toll-free number is 1-888-50EVANS (888-503-8267).
