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;
or58 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 shallimmediately 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.