On behalf of Girard Bengali, APC posted in securities arbitration and litigation on Friday, February 15, 2019.
California residents may not be aware that the Financial Industry Regulatory Authority Inc. Rule 2156 went into effect in February 2018. As per this rule, broker-dealers can put a hold on an elderly client’s disbursements if they believe that their client is being financially abused. According to representatives of Finra, they will begin conducting examinations to look into firms’ compliance with the new rules.
Holds can be placed on accounts for 15 days, with the possibility of a 10-day extension. The rule is voluntary, but legal protection will be provided to those firms that follow the rule. According to firms though, there is room for improvement as 15 days is not enough to conduct a thorough investigation into the exploitation of a senior. More time is needed to make a definitive determination.
Another problem is that communication between brokerage firms is poor. While one firm may be able to prevent funds from being disbursed because there are suspicions of elder abuse, they might not be able to contact another firm to let them know. This why Finra’s spokesperson claimed they are trying to gather information on the systems in place and experienced with compliance and how the authority can improve the rule.
While measures are being taken to prevent elder financial abuse and brokerage firm misconduct, it is important to know that there are legal options available to victims as well. Consulting an attorney experienced in securities arbitration and litigation to find out what one’s options are might be one way to move forward.