Financial Exploitation of Vulnerable Adults and Senior Citizens

STOCKBROKER LAW - Posted on January 12, 2016

The Financial Industry Regulatory Authority (FINRA) has proposed the amendment of FINRA Rule 4512 (Customer Account
Information) to require member firms to make reasonable efforts to inquire into the identity of a
trusted contact person to be contacted for a customer that may be vulnerable due to their advanced age
and cognitive impairment.

In Regulatory Notice 15-37 FINRA has also proposed the adoption of Rule 2165 entitled Financial
Exploitation of Specified Adults which would allow specified individuals employed by FINRA member firms
to temporarily place a hold on the transfer of monies and securities from the brokerage accounts of
certain customers where there is a suspicion and reasonable belief that these customers might be subject
to financial exploitation. This initiative follows FINRA previously established Securities Helpline for
Seniors designed to educate the investing public and the financial services industry of perceived
growing trend involving victimization of specified adults.

Proposed Rule 2165 would permit qualified persons to have the authority to effectively freeze transfers
from customer accounts when there may be a suspicion of possible victimization due to mental or physical
impairment that renders an investor unable to protect their own interests.

Financial exploitation includes the unauthorized or wrongful misappropriation of a specified adult’s
funds or securities, improper use of powers of attorney, guardianships or other claimed authority which
may tend to constitute deception, intimidation or undue influence and other improper conversion of a
specified adult’s money, assets or property.

We offer a free initial consultation to investors or loved ones of investors who feel they may have
been victimized by financial exploitation. For a free initial consultation, contact The Law Offices
of Timothy J. O’Connor at (168) 426-7700.