The North American Securities Administrators Association ("NASAA") found an increase in reporting by jurisdictions that adopted the Model Act to Protect Vulnerable Adults from Financial Exploitation (the "Model Act").
As previously covered, NASAA adopted the Model Act to give industry participants and state regulators new tools for detecting and preventing the financial exploitation of vulnerable adults. The Model Act (i) provides market participants with resources to detect and prevent the financial exploitation of vulnerable adults, (ii) offers broker-dealers and investment advisors immunity - under certain conditions - for delaying disbursements if a firm believes that financial exploitation is involved and (iii) requires qualified individuals to report their suspicion of the financial exploitation of a vulnerable adult to both a state securities regulator and a state adult protective services agency.
NASAA cited a "drastic increase" in the use of the statutes for jurisdictions that adopted the Model Act, noting that, out of the 426 reports, state securities regulators have (i) opened 81 investigations and (ii) initiated 32 formal enforcement actions. In addition, NASAA reported that firms have delayed disbursements of funds 57 times.
Commentary Conor Almquist
This Enforcement Report conveys positive news in the fight against financial exploitation of seniors. Given the reported success of legislation based on the NASAA's Model Act to Protect Vulnerable Adults from Financial Exploitation discussed in the Report, it seems likely that more states will consider the adoption of similar legislation and of other legislation protecting senior
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