The North American Securities Administrators Association's Model Act to Protect Vulnerable Adults from Financial Exploitation or similar protective measures have now been adopted in 27 states through legislation or regulation.
As of year-end 2019, Arizona, California, New Hampshire, Maine, Rhode Island and Virginia have passed these report and hold laws, and two states — Wisconsin and Michigan — have introduced similar bills. Bills failed to pass in Missouri and New Jersey, and for the second consecutive year in Florida and Washington, D.C.
The Model Act requires broker-dealers and state-registered investment advisers to report suspected financial exploitation of senior and vulnerable investors to state agencies. The Model Act permits firms to temporarily withhold the disbursement of funds when exploitation is suspected.
In addition, the Model Act allows firms to communicate with a contact person designated by the customer, when needed, as part of its investigation into the suspected exploitation. States that have adopted report and hold laws have frequently modified the provisions of the Model Act depending upon individual statewide considerations.
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