By 2030, seniors aged 65 and above will make up 18% of the nation’s population. Baby Boomers are turning age 65 at a rate of 10,000 a day and will continue to “age up” at this rate until 2029. Currently, Americans over the age of 50 account for 77% of personal financial assets in the United States. This group of investors owns a disproportionate share of the nation’s personal wealth and faces greater risks of cognitive decline and financial exploitation. Unfortunately, 1 in 5 seniors have been victimized by financial fraud, and seniors lose at least $2.6 billion annually to financial exploitation (virtually every expert who follows these developments believes that this number greatly understates the extent of the problem).
The Feds The Financial Industry Regulatory Authority (FINRA) https://finra.org, the Self-Regulatory Organization that regulates brokers and dealers and is supervised by the Securities and Exchange Commission (SEC) https://sec.gov, recently released Rule 2165, on “report and hold,” and amendments to Rule 4512, on “trusted contact forms,” https://finra.org/sites/default/files/Regulatory-Notice-17-11.pdf, which will go into effect in February 2018 and will bind 635.000 securities brokers and dealers.
The U.S. Senate passed S. 178, the Elder Abuse Prevention and Prosecution Act on August 1, 2017 by voice vote. Introduced by Sen. Chuck Grassley (R-Iowa) with 15 bipartisan cosponsors, the legislation would establish best practices for local, state, and federal data collection on elder abuse and standards for interagency collaboration on data collection, and would enhance the penalty for telemarketing and email fraud directed at seniors. The legislation also requires the Attorney General to designate an “Elder Justice Coordinator” responsible for the coordination and support of law enforcement efforts and policy initiatives for the Department of Justice https://justice.gov on elder abuse issues.
The States A growing number of states have enacted senior investor protection laws that extend to broker-dealers, and several other jurisdictions are currently working to develop a similar path:
California. AB 611 would authorize a mandated reporter of suspected financial abuse to not honor any Power of Attorney if s/he makes or has knowledge of someone else making a report to Adult Protective Services or law enforcement of suspected financial abuse. The bill was sent to the governor for signature September 19.
New Mexico. A senior investor protection law went into effect on July 1.
Michigan. HB 4931, introduced on September 13, would impose civil liability on persons who financially exploit a vulnerable adult. The bill would make them liable to the vulnerable adult, or to his/her estate, for damages of three times the value of the property obtained, plus attorney fees and court costs.
Ohio. (1) In the budget bill enacted on June 30, 2017 (HB 49), the list of mandatory reporters of senior abuse and exploitation was significantly expanded to include investment advisors, financial planners and others. The provisions will take effect September 29, 2018. (2) SB 158 would impose a mandatory reporting requirement and require the government to develop best practices and provide educational opportunities to combat elder fraud and exploitation, as well as establish fines and require full restitution from offenders found guilty of certain fraud-related crimes against the elderly. The bill was referred to committee on June 15 and hearings are anticipated this fall.
Oregon. (1) SB 95 was signed by the Governor on June 29 with an effective date of January 1, 2018 (Chapter 514, 2017 Laws). This law adopts the North American Securities Administrators Association Model Report & Hold Act with some modifications. (2) HB 2622, a voluntary, bank-side version of Report & Hold that permits refusal of suspicious transactions and other requests, was signed by the Governor June 14 and was effective upon enactment (Chapter 290, 2017 Laws).
Vermont. SB 56, which enhances penalties for insurance or securities violations involving a vulnerable adult, was signed by the governor on June 15, 2017 and was effective July 1.
Maryland. Maryland’s Report & Hold Law became effective on October 1, 2017.
The Job Opportunity Impact Elder financial abuse/senior fraud is rapidly becoming one of the hottest subsets of Elder Law practice. Elder Law, traditionally the province of sole practitioners and small firms, is exciting interest from major law firms who see great potential for developing a lucrative practice area.
In addition, the hundreds of thousands of U.S. financial institutions that manage senior assets, as well as federal and state financial regulatory agencies and prosecutorial offices are hiring attorneys for positions dealing with these matters.
For More Information Elder Law: Riding the Age Wave, Vol. 17 of the 21st Century Legal Career Series. Richard L. Hermann. $15.00 from http://www.nalp.org/productdetail/?productID=251.