NSCP Currents

As of the date of this article, thirty-two states have enacted some specific form of legislation applicable to broker-dealers and investment advisers to protect senior and vulnerable investors from financial exploitation.1 Twenty-nine states have adopted, in whole or in part, a statute modeled after the North American Securities Administrators Association (“NASAA”) Model Act. The state statutes typically require or permit (i) reports to government agencies, (ii) disclosure to third parties; and (iii) holds on suspicious disbursements and/or transactions.

Along with these relatively new laws, firms must comply with reporting obligations under longstanding “adult protective services” (APS) statutes that aim to protect the state’s senior and vulnerable population generally. Often, in the states that have adopted financial exploitation statutes, firms that suspect financial exploitation do not also consider making a report under the APS statute. This can often be a mistake.

This article first appeared in the NSCP’s digital publication Currents on December 1, 2020. Click here to read the full article.

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