Thursday, October 27, 2016

FINRA Close to Filing Fraud Rule for ‘Vulnerable’ Investors

FINRA plans to file its proposed Rule 4512 to help block elderly and "vulnerable" investors from financial exploitation, FINRA states that the rule change is not simply about protecting “senior” investors but all investors that fall into the “vulnerable” category—those with diminished capacity, disabilities, and even those in the military.



The FINRA plan would require member firms to “make reasonable efforts” to obtain the name of and contact information for a trusted contact person for a customer’s account by amending Rule 4512 (Customer Account Information).
The rule would also allow advisers/brokers to place a temporary hold on transactions that could be fraudulent by creating a new FINRA Rule 2160 (Financial Exploitation of Eligible Adults), and applies to investors aged 65 or older as well as investors 18 and older who have a mental or physical impairment that renders them unable to protect their own interests.


FINRA Close to Filing Fraud Rule for ‘Vulnerable’ Investors: "


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