WASHINGTON, D.C. (September 14, 2021) – The North American Securities Administrators Association (NASAA) today released an updated legislative commentary for the NASAA Model Act to Protect Vulnerable Adults from Financial Exploitation, which includes new findings and recommendations that states and stakeholders may consider as they advance efforts to protect senior and vulnerable adult investors from potential financial exploitation.
The updated legislative commentary is the culmination of a yearlong review of the efficacy and implementation of state laws modeled on or influenced by the Model Act. The Act was developed by NASAA’s Committee on Senior Issues and Diminished Capacity following engagement with various stakeholders including state and federal regulators, adult protective services agencies, law enforcement, financial professionals, and investor advocates.
The commentary includes recommendations for successful implementation of the Model Act and similar laws such as the importance of ongoing training for potential reporters and agency staff, promoting the use of a trusted contact, and approaching cases of suspected financial exploitation in a multi-disciplinary manner. These recommendations are designed to strengthen ongoing efforts and collaboration by industry and government agencies in preventing and detecting senior financial exploitation.
“Through this legislative commentary, we hope to encourage states to continue to adopt report and hold laws based on the Model Act,” said Lisa A. Hopkins, NASAA President and West Virginia Securities Commission General Counsel and Senior Deputy Commissioner of Securities. “We believe adopting these types of laws and implementing the recommendations outlined will go a long way to increasing protection for senior and vulnerable adult investors.”
The Model Act and similar laws – including several that predated the development of the Model Act – have been adopted by thirty-four jurisdictions since NASAA members voted to adopt it in 2016. The Model Act provides industry and state regulators important tools to help detect and prevent financial exploitation of vulnerable adults. In particular, the Model Act offers broker-dealer and investment adviser firms qualified immunity for delaying disbursements when the firm reasonably believes financial exploitation would result. The act also mandates reporting to a state securities regulator and state adult protective services agency when a financial professional has a reasonable belief that financial exploitation of a vulnerable adult has been attempted or has occurred.
The complete legislative text and commentary for the 2021 and 2022 legislative session, is available here on NASAA’s website, www.nasaa.org. To learn more about NASAA’s other senior investor initiatives, visit NASAA’s Serve Our Seniors website at www.serveourseniors.org.