SB 428

This bill allows securities industry professionals to provide to the Department

of Financial Institutions, adult protective service agencies, and other persons notice

of suspected financial exploitation of certain vulnerable adults and allows

broker-dealers and investment advisers to temporarily delay transactions or

disbursements from the accounts of vulnerable adults when financial exploitation of

a vulnerable adult is suspected. The bill also increases penalties for securities

violations committed against these vulnerable adults.

Under current law, upon receiving a report of alleged abuse, financial

exploitation, neglect, or self-neglect of any person age 60 or older who has

experienced, is experiencing, or is at risk of experiencing abuse, neglect, self-neglect,

or financial exploitation (an elder adult at risk), the elder-adult-at-risk agency in

a county must respond by investigating or must refer the report to another agency

for investigation. Similarly, if the adult-at-risk agency in a county has reason to

believe that an adult who has a physical or mental condition that substantially

impairs his or her ability to care for his or her needs and who has experienced, is

experiencing, or is at risk of experiencing abuse, neglect, self-neglect, or financial

exploitation (an adult at risk) is the subject of abuse, financial exploitation, neglect,

or self-neglect, the adult-at-risk agency may respond by investigating to determine

whether the adult at risk is in need of protective services. “Financial exploitation”

includes obtaining an individual's money or property by deceiving or enticing the

individual or by coercing the individual to give, sell at less than fair value, or convey

money or property against his or her will without his or her informed consent, and

also includes certain crimes such as theft and forgery.

Current law also requires, with exceptions, certain securities industry

professionals to be registered with the Division of Securities in DFI, including an

individual who represents a broker-dealer in securities transactions (securities

agent) and an investment adviser representative.

This bill allows a securities agent, investment adviser representative, or other

individual serving in a supervisory, compliance, or legal capacity for a broker-dealer

or investment adviser (qualified individual) who reasonably suspects that financial

exploitation of an adult at risk or an individual who is 60 years of age or older

(together, vulnerable adult) has occurred or is being attempted to notify the division,

an adult-at-risk agency or elder-adult-at-risk agency (together, APS agency), a law

enforcement agency, or any combination of these, as well as certain other persons,

including a legal guardian, a person identified on a contact list provided by the

vulnerable adult, and a spouse, parent, adult child, or other individual reasonably

associated with the vulnerable adult. The bill also allows a broker-dealer or

investment adviser to delay a transaction on, or disbursement from, an account of

a vulnerable adult or an account on which a vulnerable adult is a beneficiary if all

of the following apply: 1) the broker-dealer, investment adviser, or qualified