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Tougher FINRA Rules: A New Tool to Fight Financial Exploitation of Seniors and Adults with Disabilities

The Securities and Exchange Commission has just enhanced the protection for seniors and adults with disabilities who may be subject to financial abuse. Earlier this month, the Financial Industry Regulatory Authority (FINRA), an independent regulator that protects investors and regulates financial brokers and dealers, released new rules intended to block unauthorized withdrawals and other disbursements from the accounts of vulnerable adults.

Now, brokers and dealers have rules that permit them to step in when they “reasonably believe” that exploitation of a senior or adult with disabilities is taking place, and place temporary, 15-day holds on disbursements of funds or securities from accounts of their customers (holds can be extended if necessary).

In addition, the rules allow account holders to designate a “Trusted Contact Person” for their accounts, who, along with the account holder and other concerned parties, receives notification when holds are placed. Naturally, if there is reason to believe the Trusted Contact Person is part of the exploitation, that notification is not made.

These new regulations will not end the abuse of the elderly or vulnerable, but they do provide additional comfort that vulnerable loved ones can be safe from financial exploitation.

Posted in Blog, Disabilities, Older Adults.