Senior Issues: Counseling and Litigation Defense

Bressler’s Senior Issues Group combines the talents of more than 20 Attorneys, from the firm’s securities and insurance practice groups, working from our offices around the country. These lawyers have a shared interest in providing counsel to corporate clients who confront issues affecting seniors and vulnerable adults. We design programs to help our clients prevent and detect the exploitation of vulnerable investors and avoid regulatory and litigation risk.  When litigation arises, Bressler vigorously defends the financial services industry against claims of wrong doing. 

Services provided:

  • Review, design and implement senior-focused compliance programs
  • Draft written supervisory and compliance procedures
  • Prepare and conduct training programs
  • Analyze and revise marketing materials directed to seniors
  • Address privacy concerns
  • Advise on reporting obligations
  • Conduct internal investigations and informal reviews
  • Prepare firms for anticipated regulatory examinations
  • Assist with open regulatory inquiries and examinations
  • Advise on regulatory filings
  • Defend investor claims in arbitration and in court
  • Manage responses to regulatory and judicial subpoenas

In addition, Bressler’s Senior Issues Group includes attorneys from the firm’s estate planning and administration practice group. These attorneys provide critical counsel on many issues affecting seniors and those advising seniors, including identifying appropriate estate and tax planning strategies for seniors of varying wealth levels, strategies to address a client’s potential or current incapacity. For the senior clients, the attorneys in Bressler’s estate planning and administration practice group are focused on assisting clients in the implementation of appropriate estate and tax planning strategies, including:

  • The preparation of wills and trusts
  • General powers of attorney, and health care powers of attorney and living wills
  • Assistance probating wills and administering estates and trusts
  • Counseling clients on charitable planning and family philanthropy

News Updates Related to Senior Issues:

News Update (April 20, 2018): 
Continuing its efforts to protect senior investors, FINRA recently released an Investor Education article in its Alert Investor Newsletter describing two rules it adopted earlier this year. These rules were designed to create a national, uniform standard establishing actions financial advisors can take to protect their vulnerable clients from exploitation.

The first of these two rules, FINRA Rule 4512, requires a broker to make reasonable efforts to obtain the name and contact information from a client for a designated trusted contact person. This name can be obtained during the account opening process or when updating existing account information. The person identified as the trusted contact is intended to be someone who the firm can contact in order to discuss issues relating to potential exploitation as well as the investor’s account administration, health status, and contact information. The firm can also inquire as to the identity of any guardian, executor, trustee, or holder of a power of attorney who may have authority over the account. While a client is not required to provide a trusted contact, FINRA recommends it.

The second rule applies to accounts belonging to investors age 65 or older or to those who have a physical or mental impairment that the firm reasonably believes makes it difficult for them to protect their own financial interests. FINRA Rule 2165 allows a firm to place a hold of 15 business days on disbursements from a vulnerable client’s account when the firm believes that financial exploitation may be occurring. During the hold, the firm must conduct an investigation and reach out to the client and the client’s trusted contact. If the firm obtains information suggesting that financial exploitation is occurring, the firm may continue the hold for another 10 business days. Thereafter, depending upon the investigation, the firm may refer the matter to the appropriate law enforcement agency or adult protective services. The disbursement holds authorized by this rule are not permitted if financial exploitation is not suspected.

News Update (April 19, 2018): 
Principals Matthew Plant and Angela Turiano presented the Lawline webinar, “Safeguarding Against Financial Exploitation of Senior Investors: What Attorneys Need To Know”. They discussed cases involving exploitation of seniors as well as the statutory and regulatory framework aimed at protecting senior investors. Click here to read more about the webinar.

News Update (April 13, 2018): 
On April 10, 2018, Kentucky enacted laws intended to prevent the financial exploitation of vulnerable adults, becoming the nineteenth state to pass legislation based on the NASAA Model Act. The laws are effective as of July 13, 2018 and apply to broker-dealers, investment advisors, and financial institutions.  

Prior to the new legislation, Kentucky’s Economic Security and Public Welfare laws required firms that had knowledge or reasonable cause to suspect that financial exploitation had occurred to file a report with the Cabinet for Health and Family Services (the “Cabinet”).The laws were silent on whether firms could report financial exploitation that was occurring or was suspected to occur in the future.

Under the new laws, however, firms that merely have a reasonable belief that financial exploitation is occurring, has been attempted, or will be attempted are permitted to report the suspected financial exploitation to the Cabinet, the Department of Financial Institutions, and any third party that is reasonably associated with the vulnerable adult. The legislation also permits firms to place an initial 15 day hold on disbursements and transactions. Firms are granted administrative and civil immunity for making a good faith disclosure and placing a temporary hold. 

News Update (April 2, 2018): 
On March 16, 2018, Utah became the eighteenth state to pass legislation based on the NASAA Model Act to Protect Vulnerable Adults from Financial Exploitation. Utah extended the NASAA Model Act’s hold provision to allow a broker-dealer or investment adviser to place a 15-day hold on disbursements as well as transactionswhere the firm reasonably believes that financial exploitation may result. Other provisions include mandatory reporting of the financial exploitation to Utah’s Division of Securities and Adult Protective Services and permissive reporting to a person previously designated or reasonably associated with the vulnerable adult. The laws are effective May 7, 2018.

During the 2017-2018 legislative sessions, an additional eight jurisdictions have introduced similar legislation. 

News Update (March 19, 2018): 
Alex J. Sabo, a Principal in the firm's Miami office, recently spoke on "Dementia Issues for Advisers and Clients” at the 50th annual SIFMA Compliance & Legal Society Seminar. Mr. Sabo, current president of the Florida Securities Dealers Association and a nationally recognized expert on senior issues, joined a panel comprised of representatives from the North American Securities Administrators Association (NASAA), the Securities Industry and Financial Markets Association (SIFMA) and the Financial Industry Regulatory Authority (FINRA). Ronald Long, Director of Regulatory Affairs and Elder Client Initiatives at Wells Fargo Advisors, served as moderator of the panel. 

The panel addressed such diverse topics as detecting cognitive decline, FINRA Rules 2165 and 4512, employment law issues relating to Financial Advisers, and recent federal and state law developments. The presentation ended with lively audience participation addressing a factual scenario called “Home Security,” which focused upon an elderly client’s withdrawals from her brokerage account supposedly to acquire a home security system. 

News Update (March 1, 2018):
 On March 1, 2018, the Florida House of Representatives, by a vote of 113-2, approved House Bill 681, which relates to protection of vulnerable adults. Among other things, the bill provides that a securities dealer or investment advisor, who has a reasonable belief that a person age 65 or older is the subject of financial exploitation, may place a temporary hold on a transaction or distribution from the senior investor’s account.

The next step in the process involves the Florida Senate considering the legislation. Passage by the Florida House of Representatives is a major step forward to allow Florida to join the ranks of those states who provide such protection for senior investors. Please check this site frequently as Bressler will update information relating to this legislation as it makes its way through the Florida Senate.

News Update (January 30, 2018): 
The House has approved legislation that includes the proposed Senior Safe Act, which encourages financial firms to train employees to spot and deal with financial exploitation of older investors. The act includes a provision that protects financial professionals from legal liability if they report suspected fraud and abuse to law enforcement agencies and regulators. ThinkAdvisor.

News Update (January 26, 2018): 
The Financial Industry Regulatory Authority's new ruling, which comes into effect next month, that financial professionals must try to identify a trusted contact for elderly investors may prompt some difficult conversations, said Amy Daniels of Edward Jones. "We have to be real careful with that, especially with seniors, because it's a touchy subject," she said. InvestmentNews.

News Update (January 18, 2018):
Thirteen states have adopted the North American Securities Administrators Association's model legislation requiring professionals to act if they suspect elder financial abuse. About 10 states are likely to follow this year, said NASAA President Joseph Borg. InvestmentNews.

News Update (January 4, 2018): 
The Financial Industry Regulatory Authority has explained rules, scheduled to take effect Feb. 5, that prevent financial exploitation of seniors. One provision authorizes FINRA members to temporarily hold up disbursement of funds or securities from accounts "where there is a reasonable belief of financial exploitation of these customers." ThinkAdvisor

News Update (October 20, 2017):
President Donald Trump has signed into law a measure that gives US prosecutors broader authority to act against financial criminals who use telemarketing or email to exploit the elderly. The Elder Abuse Prevention and Prosecution Act also allows enhanced penalties for anyone convicted of victimizing or targeting a person older than 55. 

News Update (October 17, 2017): 
A Seventh Circuit panel on Tuesday refused to overturn a sentencing order against a California man convicted of defrauding investors — including Illinois residents — of nearly $1 million in a retirement savings scheme between 2009 and 2012. Law360.

News Update (October 4, 2017):
The Elder Abuse Prevention and Prosecution Act was passed by the Senate and then sent to the House for debate. The House passed the Act by voice vote. Then, the House reconsidered their legislative action. Bressler will let you know when this Act moves forward in the legislative process.

Bressler Publications Related to Senior Issues:

April 16, 2018
Aging Investor Base and Wealthy Baby Boomers Spur Increase in State Laws to Protect Seniors

April 3, 2018
Hold On! Analyzing FINRA's New Rules to Address Senior Financial Exploitation

March 12, 2018
The FTC Releases the 2017 Consumer Sentinel Network Data Book

January 19, 2018
NAIC Sets 2018 Agenda to Address Senior Issues

January 16, 2018
Bressler Forms Senior Issues Group to Address Baby Boomer Financial Issues

January 5, 2018
New York DFS Proposes Amendments to its Annuity Suitability Rule

December 11, 2017
The Senate Banking Committee Revised S.2155 to Project Seniors from Financial Fraud

November 14, 2017

Enforcement Priorities and Dealing With An Aging Investor Base - Bressler and NJSBA Securities Law Program Summary

November 6, 2017
Protecting Your Senior Clients: Compliance in Advance of the February 5 FINRA Deadline... and Beyond

October 23, 2017

The Elder Abuse Prevention and Prosecution Act Becomes Law

October 12, 2017
What Is Being Done To Help Avoid Financial Exploitation Of Seniors?

September 29, 2017
New York and New Jersey Market Regulation Directed to Seniors

August 17, 2017
4 Financial Resources for Senior Investors

April 20, 2017
Two-Year Anniversary of FINRA Securities Helpline for Seniors

April 10, 2017
FINRA’s National Adjudicatory Council Announces New Sanction Guidelines

March 30, 2017
FINRA Receives SEC Approval on Rules Regarding Financial Exploitation of Seniors

August 1, 2009
Seniors – The Laws, The Rules, The Cases

January 31, 2009
What’s So Special About Seniors Anyway?

September 1, 2007
When the Baby Boom Era Becomes the Retirement Explosion 

Additional Resources:

American Bar Association: Elder Abuse
FAQs Regarding FINRA Rules Relating to Financial Exploitation of Seniors
SIFMA Senior Investor Protection Page
SIFMA Senior Investor Protection Toolkit
SEC & FINRA National Senior Investor Initiative 
National Adult Protective Services Association (NAPSA)
North American Securities Administrators Association (NASAA) Pulse Survey: Seniors & Financial Exploitation
Women's Institute For A Secure Retirement (WISER): Financial Elder Abuse Resources
Women's Institute For A Secure Retirement (WISER) Special Report: Senior Fraud