The Alabama Lawyer

In April 2016, Alabama became one of the first states to enact legislation requiring certain financial institutions to report suspected financial exploitation of persons deemed to be “vulnerable clients” to governmental authorities. The goal of the Protection of Vulnerable Adults from Financial Exploitation Act (the “Act”) is to protect those individuals who may be most susceptible to financial abuse, such as elderly customers or adults with diminished capacity, from potential wrongdoers.  The Act seeks to accomplish that goal by mandating that broker-dealers, investment advisers, agents and other “qualified individuals” report suspected exploitation when those financial professionals have a reasonable belief that it may have occurred, has been attempted or is being attempted.  This article will (i) provide an overview of the Act, (ii) analyze similar efforts by state regulators and legislatures, FINRA and the federal government, and (iii) hear from various stakeholders regarding the implementation of the Act.

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