New FINRA Rules to Help Prevent Senior Financial Abuse

Last year around this time, the securities industry watchdog, FINRA (the Financial Industry Regulatory Authority), approved new rules and guidelines related to the detection and prevention of the financial exploitation of senior Americans. The new requirements are scheduled to go into effect early next month. In anticipation of the new rules, FINRA recently issued an FAQ that helps explain and clarify the new rules.

The financial exploitation of the elderly, or elder financial abuse, is not a new issue. In the past few years, as America’s enormous baby boomer population has entered seniordom, there are grave concerns that its wealth is not being protected adequately. Every year, new and more elaborate schemes appear to bilk older investors out of their life-savings. Fortunately, FINRA has committed itself to several early detection measures aimed at stemming the tide of elder financial abuse. The new measures also encourage broker-dealers to further supervise their own employees when it comes to suspicions of broker misconduct.

New FINRA Rules Aim to Prevent Elder Financial Abuse

One of the new rules, Rule 2165, allows FINRA member firms to take two new specific actions with regard to financial exploitation in senior account holders’ accounts.

The first action is to place temporary holds on the disbursement of funds from accounts owned by elderly customers where there is a “reasonable belief” that financial exploitation is occurring. The second is that FINRA insists that broker-dealers make every effort to contact the account owner’s “trusted contact” to try to prevent financial abuse or to determine if it is already taking place.

We applaud these new measures by FINRA to protect elderly investors from predators. Such measures have been a long time coming. Unfortunately, the exploitation of older American continues to occur at an alarming rate. While FINRA’s preventative guidelines will no doubt improve the situation, investors who have already fallen victim to broker fraud or investment misconduct will need to seek experienced legal counsel in order to recover their lost savings.

Financial Exploitation and Investment Fraud Law Firm

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If you or someone you know has been the victim of senior investor abuse or financial misconduct, contact our securities litigation team immediately for a free consultation toll-free at 215 462 3330 or by using our online contact form.

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