Financial Exploitation of Vulnerable Adults
Suppose you have an elderly or disabled customer who begins making decisions that don’t appear to be in his best interest. Maybe you have a hard time getting ahold of the customer when you try to call him up to talk about unusual trading activity. Maybe you suspect someone is taking advantage of the customer. If the trades appear to be legally authorized by the customer, is there anything you can do about your suspicions?
Yes. FINRA allows a member firm to put a temporary hold on the disbursement of funds or securities from an account if it suspects that an elderly or disabled customer is being exploited. FINRA calls this category of customers, specified adults. This type of temporary hold can be placed on an account if:
- • One of the individuals authorized to transact business on the account is a specified adult, defined as one of the following:
- » At least 65 years of age
- » At least 18 years of age and has a mental or physical condition that keeps him from protecting his own interests
- • The member firm has a reasonable belief that the customer may be the victim of financial exploitation
Financial exploitation is defined broadly for these purposes. Such exploitation can consist of “taking, withholding, appropriation, or use” of assets in the customer’s account, whether cash or securities. The reasonable belief can be in regard to past, present, or future exploitation. It can involve unusual actions that the customer supposedly took, or it can involve actions taken by someone else “through the use of a power of attorney, guardianship, or any other authority.” It can involve suspicion of intimidation, trickery, a combination of the two, or any other form of “undu