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December 09, 2015 at 10:59 AM
Securities and Exchange Commission Investor Advocate Rick Fleming is “actively” assessing what type of rule the agency should promulgate for RIAs to protect elderly or handicapped customers’ account if there is a reasonable belief of elder fraud.
The Financial Industry Regulatory Authority and the North American Securities Administrators Association have recently proposed rules to place a temporary hold on disbursement of funds or securities from accounts in case of potential fraud.
“I haven’t made an official recommendation to the commission or Congress” on a rule for federally registered advisors to “put a pause on transactions” that look to be elder fraud, Fleming said during comments at the MarketCounsel Summit in Miami Beach on Wednesday, “but that’s something I’m looking into.”
Fleming said that he has also not yet commented on FINRA’s proposal, which the self-regulator released for comment in mid-October. The comment period on FINRA’s plan expired Nov. 30. The comment period on the NASAA plan expired Oct. 29.
Fleming said that his main worry regarding elder fraud is that when looking at demographics, “you have a generation that’s starting to retire, with lots of elderly and a much greater number of seniors suffering from diminished capacity.” What’s more, he added, “boomers are going to be retiring with greater control of their retirement assets than previous generations have. So now we have people retiring that have built up a nest egg that will have control over those assets, at the same time they have diminished capacity issues. I think you could have a recipe for real problems.”
