The Securities and Exchange Commission’s Investor Advocate, Rick Fleming, stated in his Financial Year 2015 Report that while financial firms should have the ability pause outgoing funds if fraud or financial exploitation is occurring, they should also have to report the suspicion to adult protective services.
Fleming intends to observe the proposed plans by the North American Securities Administrators Association and the Financial Industry Regulatory Authority, and decide if appropriate limits should be placed.
More details from ThinkAdvisor:
In his report to Congress, Fleming said that any elder fraud rule or law “must balance two potentially conflicting goals: to respect every individual’s right to self-determination, and also to prevent his or her unwitting financial self-destruction. We should remove undue restraints that keep financial professionals from acting to protect their clients. Yet if we confer new authority on broker-dealers and investment advisors to intervene in clients’ accounts when they suspect elder exploitation, we must place appropriate limits on that authority.”
The challenge, he said, “is to strike the right balance.”
For this type of reporting mechanism to be effective, Fleming said in his report, “it is necessary for APS to have adequate resources to do the job. Sadly, those resources appear to be lacking.”
Congress authorized $125 million to fight elder financial abuse when it passed the Elder Justice Act in 2010, but “the first actual appropriation came in 2015 and amounted to $4 million,” Fleming said. “Additional funding would go a long way toward helping APS address the financial exploitation of seniors, a problem that likely will grow in the coming years.”
Read Fleming’s full report here.
Photo by arsheffield via Flickr CC License
