FINRA Announces Increasing Protection for Senior Investors

Posted on April 20th, 2018 at 10:01 AM
FINRA Announces Increasing Protection for Senior Investors

From the Desk of Jim Eccleston at Eccleston Law LLC:

FINRA wants better protection for seniors. To that end, FINRA has detailed the requirements under the amendments to Rule 4512 (Customer Account Information) and to Rule 2165 (Financial Exploitation of Specified Adults).  

Regarding the amendments to Rule 4512 (Customer Account Information), the new rule requires a broker to make reasonable efforts to obtain the name and contact information for a designated “trusted contact person” when opening a brokerage account for a senior customer. In its publication, FINRA explains that adding a “trusted contact person” to an individual’s account will protect assets and limit potential financial exploitation. The “trusted person” is intended to provide information regarding the specifics of the customer’s health, and/or provide the identity of any legal guardian, executor, trustee or holder of a power of attorney who is involved in any decision making.  

Regarding Rule 2165 (Financial Exploitation of Specified Adults), brokerage firms now are permitted to put a temporary hold on disbursements of funds or securities if they suspect exploitation for accounts where the customers are 65 years or older or have mental or physical impairments. More specifically, a firm can hold disbursements from a customer’s account for up to 15 business days if they suspect any exploitation. Moreover, once an investigation is conducted, the firm may continue to hold disbursements for another 10-business day. Furthermore, depending on the results of the investigation, the broker may refer the matter to an adult protective service agency or to a law enforcement agency.

The attorneys of Eccleston Law LLC represent investors and advisors nationwide in securities and employment matters. The securities lawyers at Eccleston Law also practice a variety of other areas of practice for financial investors and advisors including Securities FraudCompliance ProtectionBreach of Fiduciary DutyFINRA Matters, and much more. Our attorneys draw on a combined experience of nearly 65 years in delivering the highest quality legal services. If you are in need of legal services, contact us to schedule a one-on-one consultation today.

Related Attorneys: James J. Eccleston

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