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New FINRA Guidelines Aim to Protect Seniors from Elder Financial Fraud


Learn about the safeguards that can help older investors

The Financial Industry Regulatory Authority (FINRA) is a nonprofit organization overseen by the government and tasked by the securities industry to protect investors through the creation and enforcement of rules and regulations. Periodically, FINRA makes adjustments and revisions to its guidelines, and the agency recently added measures to safeguard elderly investors.

In its 17-13 regulatory notice, FINRA spells out its new principal consideration, one of which is intended to protect vulnerable customers. Focusing on the undue influence a broker could have over a customer, the regulation “reaffirms that financial exploitation of senior and other vulnerable customers should result in strong sanctions.”

In addition, FINRA has created more new rules to stop the exploitation of seniors. Starting in February of 2018, firms will have to make an effort to get the name and information of a trusted contact person associated with the customer’s account. And if it is believed that financial exploitation of an elderly customer has occurred, firms will also be allowed to put a temporary hold on a disbursement of funds. This will give firms the time to investigate the situation and get in touch with the customer, trusted contact, and – if necessary – law enforcement.

“These rules will provide firms with tools to respond more quickly and effectively to protect seniors from financial exploitation,” said Robert W. Cook, FINRA President and CEO. “This project included input and support from both investor groups and industry representatives and it demonstrates a shared commitment to an important, common goal – protecting senior investors.”

Although there have been some positive signs recently when it comes to elder financial fraud, including increased awareness of the issue, it continues to be an epidemic around the country. In fact, part of why FINRA is making new rules has to do with the number of calls their helpline has gotten. Created in April of 2015, this helpline has received almost 9,000 calls. On a positive note, in just two years, FINRA has been able to recover more than $4.3 million for seniors who were victims of elder investment fraud.

If you suspect that you or a loved one has been the victim of fraud, you too may be eligible to get money back. To find out, contact the Silver Law Group for a free consultation from an experienced securities arbitration attorney.

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