Florida Senate - 2020 CS for SB 1672 By the Committee on Judiciary; and Senators Broxson and Baxley 590-03503-20 20201672c1 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 specifying required information in the form for such 19 notice; authorizing a court of competent jurisdiction 20 to shorten or extend a delay; requiring dealers and 21 investment advisers to make certain records available 22 to the office upon request; providing for 23 administrative and civil immunity for dealers, 24 investment advisers, and associated persons; 25 specifying training and written procedures 26 requirements for dealers and investment advisers 27 before they may place a delay; providing for 28 rulemaking by the Financial Services Commission; 29 providing construction; providing an effective date. 30 31 Be It Enacted by the Legislature of the State of Florida: 32 33 Section 1. Paragraph (a) of subsection (1) of section 34 415.1034, Florida Statutes, is amended to read: 35 415.1034 Mandatory reporting of abuse, neglect, or 36 exploitation of vulnerable adults; mandatory reports of death.— 37 (1) MANDATORY REPORTING.— 38 (a) Any person, including, but not limited to, any: 39 1. Physician, osteopathic physician, medical examiner, 40 chiropractic physician, nurse, paramedic, emergency medical 41 technician, or hospital personnel engaged in the admission, 42 examination, care, or treatment of vulnerable adults; 43 2. Health professional or mental health professional other 44 than one listed in subparagraph 1.; 45 3. Practitioner who relies solely on spiritual means for 46 healing; 47 4. Nursing home staff; assisted living facility staff; 48 adult day care center staff; adult family-care home staff; 49 social worker; or other professional adult care, residential, or 50 institutional staff; 51 5. State, county, or municipal criminal justice employee or 52 law enforcement officer; 53 6. Employee of the Department of Business and Professional 54 Regulation conducting inspections of public lodging 55 establishments under s. 509.032; 56 7. Florida advocacy council or Disability Rights Florida 57 member or a representative of the State Long-Term Care Ombudsman 58 Program;
or59 8. Bank, savings and loan, or credit union officer, 60 trustee, or employee; or 61 9. Dealer, investment adviser, or associated person under 62 chapter 517, 63 64 who knows, or has reasonable cause to suspect, that a vulnerable 65 adult has been or is being abused, neglected, or exploited must 66 shallimmediately report such knowledge or suspicion to the 67 central abuse hotline. 68 Section 2. Section 517.34, Florida Statutes, is created to 69 read: 70 517.34 Protection of specified adults.— 71 (1) As used in this section, the term: 72 (a) “Financial exploitation” means the wrongful or 73 unauthorized taking, withholding, appropriation, or use of 74 money, assets, or property of a specified adult; or any act or 75 omission by a person, including through the use of a power of 76 attorney, guardianship, or conservatorship of a specified adult, 77 to: 78 1. Obtain control over the specified adult’s money, assets, 79 or property through deception, intimidation, or undue influence 80 to deprive him or her of the ownership, use, benefit, or 81 possession of the money, assets, or property; or 82 2. Convert the specified adult’s money, assets, or property 83 to deprive him or her of the ownership, use, benefit, or 84 possession of the money, assets, or property. 85 (b) “Specified adult” means a natural person 65 years of 86 age or older, or a vulnerable adult as defined in s. 415.102. 87 (c) “Trusted contact” means a natural person 18 years of 88 age or older who the account owner has expressly identified and 89 who is recorded in a dealer’s or investment adviser’s books and 90 records as the person who may be contacted about the account. 91 (2) The Legislature finds that many persons in this state, 92 because of age or disability, are at increased risk of financial 93 exploitation and loss of their assets, funds, investments, and 94 investment accounts. The Legislature further finds that senior 95 investors in this state are at a statistically higher risk of 96 being targeted for financial exploitation, regardless of 97 diminished capacity or other disability, because of their 98 accumulation of substantial assets and wealth compared to 99 younger age groups. In enacting this section, the Legislature 100 recognizes the freedom of specified adults to manage their 101 assets, make investment choices, and spend their funds, and 102 intends that such rights may not be infringed absent a 103 reasonable belief of financial exploitation as provided in this 104 section. The Legislature therefore intends to provide for the 105 prevention of financial exploitation of such persons. The 106 Legislature intends to encourage the constructive involvement of 107 securities dealers, investment advisers, and associated persons 108 who take action based upon the reasonable belief that specified 109 adults with investment accounts have been or are the subject of 110 financial exploitation, and to provide securities dealers, 111 investment advisers, and associated persons immunity from 112 liability for taking actions as authorized herein. The 113 Legislature intends to balance the rights of specified adults to 114 direct and control their assets, funds, and investments and 115 exercise their constitutional rights consistent with due process 116 with the need to provide securities dealers, investment 117 advisers, and associated persons the ability to place narrow, 118 time-limited restrictions on these rights in an effort to 119 decrease specified adults’ risk of loss due to abuse, neglect, 120 or financial exploitation. 121 (3) A dealer or investment adviser may delay a disbursement 122 or transaction of funds or securities from an account of a 123 specified adult or an account for which a specified adult is a 124 beneficiary or beneficial owner if all of the following apply: 125 (a) The dealer or investment adviser reasonably believes 126 that financial exploitation of the specified adult has occurred, 127 is occurring, has been attempted, or will be attempted in 128 connection with the disbursement or transaction. 129 (b) Not later than 3 business days after the date on which 130 the delay was first placed, the dealer or investment adviser 131 notifies in writing all parties authorized to transact business 132 on the account and any trusted contact on the account, using the 133 contact information provided for the account, with the exception 134 of any party the dealer or investment adviser reasonably 135 believes has engaged in, is engaging in, has attempted to engage 136 in, or will attempt to engage in the suspected financial 137 exploitation of the specified adult. The notice, which may be 138 provided electronically, must provide the reason for the delay. 139 (c) Not later than 3 business days after the date on which 140 the delay was first placed, the dealer or investment adviser 141 notifies the office of the delay electronically on a form 142 prescribed by commission rule. The form must be consistent with 143 the purposes of this section and may include only the following 144 information: 145 1. The date the notification is submitted to the office. 146 2. The date on which the delay was first placed. 147 3. The following information about the specified adult: 148 a. Gender. 149 b. Age. 150 c. Zip code of residence address. 151 4. The following information about the dealer or investment 152 adviser who placed the delay: 153 a. Name. 154 b. Title. 155 c. Firm name. 156 d. Business address. 157 5. A section with the following questions for which the 158 only allowable responses are “Yes” or “No”: 159 a. Is financial exploitation of a specified adult suspected 160 in connection with a transaction or disbursement? 161 b. Are funds currently at risk of being lost? 162 163 The form must contain substantially the following statement in 164 conspicuous type: “The office may take disciplinary action 165 against any person making a knowing and willful 166 misrepresentation on this form.” 167 (d) The dealer or investment adviser immediately initiates 168 an internal review of the facts and circumstances that caused 169 the dealer or investment adviser to reasonably believe that the 170 financial exploitation of the specified adult has occurred, is 171 occurring, has been attempted, or will be attempted. 172 (4) A delay on a disbursement or transaction under 173 subsection (3) expires 15 business days after the date on which 174 the delay was first placed. However, the dealer or investment 175 adviser may extend the delay for up to 10 additional business 176 days if the dealer’s or investment adviser’s review of the 177 available facts and circumstances continues to support such 178 dealer’s or investment adviser’s reasonable belief that 179 financial exploitation of the specified adult has occurred, is 180 occurring, has been attempted, or will be attempted. A dealer or 181 investment adviser that extends a delay shall notify the office 182 on a form prescribed by commission rule not later than 3 183 business days after the date on which the extension was applied. 184 The notice must identify the dealer or investment adviser that 185 extended the delay and the date on which the delay was 186 originally made. The length of the delay may be shortened or 187 extended at any time by a court of competent jurisdiction. This 188 subsection does not prevent a dealer or investment adviser from 189 terminating a delay after communication with the parties 190 authorized to transact business on the account and any trusted 191 contact on the account. 192 (5) A dealer or investment adviser must make available to 193 the office, upon request, all records relating to a delay placed 194 by the dealer or investment adviser pursuant to this section, as 195 prescribed by commission rule. 196 (6) A dealer, an investment adviser, or an associated 197 person who in good faith and exercising reasonable care complies 198 with this section is immune from any administrative or civil 199 liability that might otherwise arise from such delay in a 200 disbursement or transaction in accordance with this section. 201 This subsection does not supersede or diminish any immunity 202 granted under chapter 415. 203 (7) Before placing a delay on a disbursement or transaction 204 pursuant to this section, a dealer or an investment adviser 205 shall do all of the following: 206 (a) Develop training policies or programs reasonably 207 designed to educate associated persons on issues pertaining to 208 financial exploitation. 209 (b) Conduct training for all associated persons at least 210 annually and maintain a written record of all trainings 211 conducted. 212 (c) Develop, maintain, and enforce written procedures 213 regarding the manner in which suspected financial exploitation 214 is reviewed internally, including, if applicable, the manner in 215 which suspected financial exploitation is required to be 216 reported to supervisory personnel. 217 (8) Absent a reasonable belief of financial exploitation as 218 provided in this section, this section does not alter a 219 dealer’s, an investment adviser’s, or an associated person’s 220 obligation to comply with instructions from a client to buy or 221 sell securities, disburse funds or transfer securities from an 222 account, close an account, or transfer an account to another 223 dealer, investment adviser, or associated person. 224 (9) This section does not create new rights for or impose 225 new obligations on a dealer, an investment adviser, or an 226 associated person under other applicable law. This section does 227 not limit the right of a dealer, an investment adviser, or an 228 associated person to otherwise refuse or place a delay on a 229 disbursement or transaction under other applicable law or under 230 an applicable customer agreement. 231 Section 3. This act shall take effect July 1, 2020.