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Zorluk: Çok zorFinancial Exploitation of Senior Investors and Vulnerable Adults

A compliance officer at a member firm receives an urgent report from a registered representative regarding a 72-year-old client. The client recently requested an immediate wire disbursement of $50,000 to an unverified third party and instructed the firm to liquidate securities to fund the transaction. Suspecting financial exploitation, the firm decides to take regulatory action under FINRA rules. Which of the following statements correctly state authorized procedures or mandatory requirements for the broker-dealer under FINRA Rule 2165 and FINRA Rule 4512 in this scenario?

  1. The member firm may place a temporary hold on the requested $50,000 cash disbursement for an initial period of up to 15 business days while investigating the matter.Cevap
  2. The firm must provide notification of the hold and the reason for the hold to the designated trusted contact person no later than 2 business days after placing the hold, unless the trusted contact is suspected of the exploitation.Cevap
  3. C
    The member firm is authorized under FINRA Rule 2165 to refuse execution of the customer's sell order for securities in order to prevent market loss during the exploitation investigation.
  4. D
    The temporary hold automatically freezes all securities trading and cash transfers across all joint accounts held by the customer's immediate family members for up to 30 calendar days.

Cevap

The firm is authorized to place an initial temporary hold of up to 15 business days on the disbursement of funds or securities under FINRA Rule 2165, and it must notify the account's trusted contact person (and authorized transacting parties not suspected of wrong-doing) within 2 business days.
Under FINRA Rule 2165, member firms have safe harbor protection to place an initial temporary hold of up to 15 business days on requested disbursements of funds or securities from the account of a specified adult (age 65+) when financial exploitation is reasonably suspected. Additionally, the rule requires the firm to notify all authorized transactors and the trusted contact person within 2 business days of placing the hold, provided those individuals are not suspected of involvement in the financial exploitation.

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1
Identify the applicability of FINRA Rule 2165 for specified adults.
The client is 72 years old, qualifying as a specified adult (natural person age 65 or older, or age 18 or older with mental/physical impairment).
FINRA Rule 2165 creates a safe harbor for firms placing temporary holds on disbursements when financial exploitation is suspected.
2
Evaluate allowable actions regarding disbursements vs. trade execution.
Disbursements of funds/securities can be placed on an initial hold for up to 15 business days, but trade executions within the account cannot be blocked under Rule 2165.
Rule 2165 specifically targets funds/securities leaving the account, not internal portfolio trading or asset liquidations.
3
Determine notification requirements under FINRA Rule 2165 and FINRA Rule 4512.
The firm must notify all authorized account transactors and the trusted contact person orally or in writing within 2 business days of placing the hold, omitting any party suspected of the exploitation.
Timely notification allows legitimate trusted individuals or legal representatives to assist in resolving potential exploitation concerns.

Anahtar Kavram

FINRA Rule 2165 Disbursement Holds and FINRA Rule 4512 Trusted Contact Person Disclosures
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Konular

Financial Exploitation of Senior Investors and Vulnerable Adults