February 26, 2018

CT beefing up shields for elder investors

Connecticut Banking Commissoner Jorge Perez.

Connecticut's top banking regulator is hailing new and expanded national financial-industry safeguards for investors, adding he wants to widen such oversight in this state.

Meanwhile, state Banking Commissioner Jorge Perez also announced that, in the wake of mounting investment exploitation and abuse of seniors, the agency is stepping up efforts to educate the public about prevention steps.

Perez said the Financial Industry Regulatory Authority's (FINRA) latest rules, enacted in early February, complement legislation that his agency will soon present to state lawmakers to protect clients of securities broker-dealers from financial exploitation.

FINRA is a self-regulating body that oversees brokerage firms.

One of the rules, FINRA Rule 2165 (financial exploitation of specified adults), allows broker-dealers to place temporary holds on disbursements of funds or securities where there is a reasonable belief of financial exploitation, Perez said.

Once the hold has been placed, broker-dealers have two days to notify all those authorized to transact business as well as the trusted contact for the account. Next, the broker-dealer must initiate a review of facts and circumstances surrounding the case. Temporary holds expire within 15 days, unless extended by state or federal regulators, or the courts.

Another is amended FINRA Rule 4512 (customer account information) which now requires broker-dealers to make reasonable efforts to obtain the name and contact information for a trusted contact person for a customer's account.

Perez said he will ask lawmakers to expand the temporary-hold provision and customer-account requirements to investment advisors and other financial professionals, as well as to banks and credit unions.

To stem the rising tide of financial abuse of Connecticut seniors, Perez announced the launch of Senior$afe, training for financial professionals to identify and report elder financial exploitation. The training details factors that contribute to the prevalence of senior financial abuse, and helps financial professionals identify the red flags of fraud, exploitation or abuse, he said.

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