A new Michigan law aims to curb the financial exploitation of senior citizens and other individuals. The law allows broker-dealers or investment providers to delay disbursement of funds or other transactions if the dealer or provider suspects that a client is being financially exploited.
According to the AARP, financial exploitation is the most common form of elder abuse in the United States, with the average victim losing $120,000.
How does the law define financial exploitation?
Under the law, “covered financial exploitation” means financial exploitation of an individual through deception, manipulation, coercion, intimidation, or improper leveraging of a caregiver relationship.
What does the law provide?
The law amends the Uniform Securities Act to do the following:
- Allows a broker-dealer or investment adviser to delay the disbursement of funds or a transaction if he or she suspects financial exploitation of a client or customer. Delays range from 15 to 40 business days or by court order.
- Requires the broker-dealer or investment advisor to contact law enforcement or adult protective services if he or she suspects or detects covered financial exploitation. The law enforcement or adult protective services agencies are required to notify the county prosecutor within 15 business days of receiving the report;
- Allows the broker-dealer or investment advisor to retain records related to the suspected or detected financial exploitation. He or she is then required to provide the records to law enforcement, adult protective services, and/or the county prosecutor, if applicable;
- Provides that a broker-dealer or investment adviser who exercised good faith in an action, determination, omission, or practice would be immune from any administrative or civil liability that might arise while taking action; and
- Delay on the transactions end on the day in which a broker-dealer or investment adviser is informed of the dismissal of the incident by the relevant agencies.
Help is available
The attorneys at O’Reilly Rancilio are available to answer your questions regarding Michigan law. To speak with an attorney, please call 586-726-1000 or visit our website.
