Senior investors are among the most frequently targeted victims of financial exploitation. In order to better protect this group of people, the Financial Industry Regulatory Authority (FINRA), adopted new rules to allow brokers to take additional steps to protect senior investors and other specific groups, the first nationally standardized protection of its type in the nation. These rules include:
Including an Additional Person as a Point of Contact on Accounts
This new FINRA rule requires brokers to make a reasonable effort to secure someone to fill the role of designated trusted contact person to include on the senior investor’s brokerage account. This person will act as a resource for the brokerage firm who can assist in responding to possible cases of exploitation, the protection of assets, and account administration.
Placing Holds on Suspicious Activity
Placing holds when potential fraud is detected is not a new process in the financial world, brokers now have permission to use the same responses as most banks in these situations. This rule specifically applies to accounts belonging to people 65 years old and above and people with physical or mental impairments that make it difficult for them to protect their investments.
"Before this new rule, firms were really struggling with this day to day," said Jeanette Wingler, an attorney in FINRA's Office of the General Counsel. The new rule gives "the firms time to investigate when a request for a disbursement raises red flags."
Firms or brokers that suspect financial exploitation may be occurring can place a hold on disbursements from that account for up to 15 business days, and may continue that hold for an additional 10 days if additional information supports the initial suspicion comes up during its investigation. The account holder and trusted contact will be notified of the hold.
If you or one of your loved ones was the victim of financial exploitation, our investment fraud lawyers at Meyer Wilson are ready to hear your story. Over the past 19 years, we have successfully recovered more than $350 million in verdicts and settlements for our clients. Send us your information through our online form to set up a free case consultation, or give us a call at one of our office locations to talk one of our attorneys over the phone today.