Florida Senate - 2020 SB 1672
By Senator Broxson
1-00955B-20 20201672__
1 A bill to be entitled
2 An act relating to the protection of vulnerable
3 investors; amending s. 415.1034, F.S.; requiring
4 securities dealers, investment advisers, and
5 associated persons to immediately report knowledge or
6 suspicion of abuse, neglect, or exploitation of
7 vulnerable adults to the Department of Children and
8 Families’ central abuse hotline; creating s. 517.34,
9 F.S.; defining terms; providing legislative findings
10 and intent; authorizing dealers and investment
11 advisers to delay disbursements or transactions of
12 funds or securities from certain accounts associated
13 with specified adults if certain conditions are met;
14 specifying the expiration of a delay; authorizing
15 dealers and investment advisers to extend delays under
16 certain circumstances; providing requirements for
17 notifying the Office of Financial Regulation;
18 authorizing a court of competent jurisdiction to
19 shorten or extend a delay; requiring dealers and
20 investment advisers to make certain records available
21 to the office upon request; providing for
22 administrative and civil immunity for dealers,
23 investment advisers, and associated persons;
24 specifying training and written procedures
25 requirements for dealers and investment advisers
26 before they may place a delay; providing for
27 rulemaking by the Financial Services Commission;
28 providing construction; providing an effective date.
29
30 Be It Enacted by the Legislature of the State of Florida:
31
32 Section 1. Paragraph (a) of subsection (1) of section
33 415.1034, Florida Statutes, is amended to read:
34 415.1034 Mandatory reporting of abuse, neglect, or
35 exploitation of vulnerable adults; mandatory reports of death.—
36 (1) MANDATORY REPORTING.—
37 (a) Any person, including, but not limited to, any:
38 1. Physician, osteopathic physician, medical examiner,
39 chiropractic physician, nurse, paramedic, emergency medical
40 technician, or hospital personnel engaged in the admission,
41 examination, care, or treatment of vulnerable adults;
42 2. Health professional or mental health professional other
43 than one listed in subparagraph 1.;
44 3. Practitioner who relies solely on spiritual means for
45 healing;
46 4. Nursing home staff; assisted living facility staff;
47 adult day care center staff; adult family-care home staff;
48 social worker; or other professional adult care, residential, or
49 institutional staff;
50 5. State, county, or municipal criminal justice employee or
51 law enforcement officer;
52 6. Employee of the Department of Business and Professional
53 Regulation conducting inspections of public lodging
54 establishments under s. 509.032;
55 7. Florida advocacy council or Disability Rights Florida
56 member or a representative of the State Long-Term Care Ombudsman
57 Program; or
58 8. Bank, savings and loan, or credit union officer,
59 trustee, or employee; or
60 9. Dealer, investment adviser, or associated person under
61 chapter 517,
62
63 who knows, or has reasonable cause to suspect, that a vulnerable
64 adult has been or is being abused, neglected, or exploited must
65 shall immediately report such knowledge or suspicion to the
66 central abuse hotline.
67 Section 2. Section 517.34, Florida Statutes, is created to
68 read:
69 517.34 Protection of specified adults.—
70 (1) As used in this section, the term:
71 (a) “Financial exploitation” means the wrongful or
72 unauthorized taking, withholding, appropriation, or use of
73 money, assets, or property of a specified adult; or any act or
74 omission by a person, including through the use of a power of
75 attorney, guardianship, or conservatorship of a specified adult,
76 to:
77 1. Obtain control over the specified adult’s money, assets,
78 or property through deception, intimidation, or undue influence
79 to deprive him or her of the ownership, use, benefit, or
80 possession of the money, assets, or property; or
81 2. Convert the specified adult’s money, assets, or property
82 to deprive him or her of the ownership, use, benefit, or
83 possession of the money, assets, or property.
84 (b) “Specified adult” means a natural person 65 years of
85 age or older, or a vulnerable adult as defined in s. 415.102.
86 (c) “Trusted contact” means a natural person 18 years of
87 age or older who the account owner has expressly identified and
88 who is recorded in a dealer’s or investment adviser’s books and
89 records as the person who may be contacted about the account.
90 (2) The Legislature finds that many persons in this state,
91 because of age or disability, are at increased risk of financial
92 exploitation and loss of their assets, funds, investments, and
93 investment accounts. The Legislature further finds that senior
94 investors in this state are at a statistically higher risk of
95 being targeted for financial exploitation, regardless of
96 diminished capacity or other disability, because of their
97 accumulation of substantial assets and wealth compared to
98 younger age groups. In enacting this section, the Legislature
99 recognizes the freedom of specified adults to manage their
100 assets, make investment choices, and spend their funds, and
101 intends that such rights may not be infringed absent a
102 reasonable belief of financial exploitation as provided in this
103 section. The Legislature therefore intends to provide for the
104 prevention of financial exploitation of such persons. The
105 Legislature intends to encourage the constructive involvement of
106 securities dealers, investment advisers, and associated persons
107 who take action based upon the reasonable belief that specified
108 adults with investment accounts have been or are the subject of
109 exploitation, and to provide securities dealers, investment
110 advisers, and associated persons immunity from liability for
111 taking actions as authorized herein. The Legislature intends to
112 balance the rights of specified adults to direct and control
113 their assets, funds, and investments and exercise their
114 constitutional rights consistent with due process with the need
115 to provide securities dealers, investment advisers, and
116 associated persons the ability to place narrow, time-limited
117 restrictions on these rights in an effort to decrease specified
118 adults’ risk of loss due to abuse, neglect, or exploitation.
119 (3) A dealer or investment adviser may delay a disbursement
120 or transaction of funds or securities from an account of a
121 specified adult or an account for which a specified adult is a
122 beneficiary or beneficial owner if all of the following apply:
123 (a) The dealer or investment adviser reasonably believes
124 that financial exploitation of the specified adult has occurred,
125 is occurring, has been attempted, or will be attempted in
126 connection with the disbursement or transaction.
127 (b) Not later than 3 business days after the date on which
128 the delay was first placed, the dealer or investment adviser
129 notifies in writing all parties authorized to transact business
130 on the account and any trusted contact on the account, using the
131 contact information provided for the account, with the exception
132 of any party the dealer or investment adviser reasonably
133 believes engaged or is engaging in the suspected financial
134 exploitation of the specified adult. The notice, which may be
135 provided electronically, must provide the reason for the delay.
136 (c) Not later than 3 business days after the date on which
137 the delay was first placed, the dealer or investment adviser
138 notifies the office of the delay by telephone using a number
139 designated by the office for such purpose or electronically on a
140 form prescribed by commission rule. The notice must identify the
141 dealer or investment adviser that made the delay, the name of
142 the person who authorized the delay, and the date on which the
143 delay was made.
144 (d) The dealer or investment adviser immediately initiates
145 an internal review of the facts and circumstances that caused
146 the dealer or investment adviser to reasonably believe that the
147 financial exploitation of the specified adult has occurred, is
148 occurring, has been attempted, or will be attempted.
149 (4) A delay on a disbursement or transaction under
150 subsection (3) expires 15 business days after the date on which
151 the delay was first placed. However, the dealer or investment
152 adviser may extend the delay for up to 10 additional business
153 days if the dealer’s or investment adviser’s review of the
154 available facts and circumstances continues to support such
155 dealer’s or investment adviser’s reasonable belief that
156 financial exploitation of the specified adult has occurred, is
157 occurring, has been attempted, or will be attempted. A dealer or
158 investment adviser who extends a delay shall notify the office
159 in accordance with paragraph (3)(c) not later than 3 business
160 days after the date on which the extension was applied. The
161 notice must identify the dealer or investment adviser that
162 extended the delay and the date on which the delay was
163 originally made. The length of the delay may be shortened or
164 extended at any time by a court of competent jurisdiction. This
165 subsection does not prevent a dealer or investment adviser from
166 terminating a delay after communication with the parties
167 authorized to transact business on the account and any trusted
168 contact on the account.
169 (5) A dealer or investment adviser must make available to
170 the office, upon request, all records relating to a delay made
171 by the dealer or investment adviser pursuant to this section, as
172 prescribed by commission rule.
173 (6) A dealer, an investment adviser, or an associated
174 person who in good faith and exercising reasonable care complies
175 with this section is immune from any administrative or civil
176 liability that might otherwise arise from such delay in a
177 disbursement or transaction in accordance with this section.
178 This subsection does not supersede or diminish any immunity
179 granted under chapter 415.
180 (7) Before placing a delay on a disbursement or transaction
181 pursuant to this section, a dealer or an investment adviser
182 shall do all of the following:
183 (a) Develop training policies or programs reasonably
184 designed to educate associated persons on issues pertaining to
185 financial exploitation.
186 (b) Conduct training for all associated persons at least
187 annually and maintain a written record of all trainings
188 conducted.
189 (c) Develop, maintain, and enforce written procedures
190 regarding the manner in which suspected financial exploitation
191 is reviewed internally, including, if applicable, the manner in
192 which suspected financial exploitation is required to be
193 reported to supervisory personnel.
194 (8) Absent a reasonable belief of financial exploitation as
195 provided in this section, this section does not alter a
196 dealer’s, an investment adviser’s, or an associated person’s
197 obligation to comply with instructions from a client to buy or
198 sell securities, disburse funds or transfer securities from an
199 account, close an account, or transfer an account to another
200 dealer, investment adviser, or associated person.
201 (9) This section does not create new rights for or impose
202 new obligations on a dealer, an investment adviser, or an
203 associated person under other applicable law. This section does
204 not limit the right of a dealer, an investment adviser, or an
205 associated person to otherwise refuse or place a delay on a
206 disbursement or transaction under other applicable law or under
207 an applicable customer agreement.
208 Section 3. This act shall take effect July 1, 2020.