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Zorluk: Çok zorFinancial Exploitation of Senior Investors and Vulnerable Adults

An 81-year-old investor instructs a registered representative to liquidate $50,000 of equity securities and wire the cash proceeds to an unverified overseas account. The representative reasonably suspects financial exploitation and identifies that the customer's designated trusted contact person is the individual pressuring the client to complete this transfer. Under FINRA Rule 2165 and FINRA Rule 4512, which of the following compliance actions is permitted regarding this transaction?

  1. The member firm may place a temporary hold on the cash disbursement while executing the security liquidation, and it is exempt from notifying the trusted contact person if that individual is suspected of the exploitation.Cevap
  2. B
    The member firm must refuse to execute the trade order to liquidate the securities and place an immediate 15-business-day hold on all order entries for the customer's account.
  3. C
    The member firm is required to notify the trusted contact person within 2 business days after placing the disbursement hold, regardless of whether that contact is suspected of involvement in the exploitation.
  4. D
    The member firm can only place a temporary hold on physical paper check disbursements, meaning electronic wire transfers must be processed immediately unless a court order is presented.

Cevap

The member firm may place a temporary hold on the cash disbursement while executing the security liquidation, and it is exempt from notifying the trusted contact person if that individual is suspected of the exploitation.
Under FINRA Rule 2165, a member firm that reasonably suspects financial exploitation of a specified adult may place a temporary hold on fund disbursements (such as wire transfers out of the account). The rule does not prohibit executing sell orders within the account. Additionally, while the firm must generally notify all account parties and the trusted contact person within 2 business days of imposing the hold, it is explicitly exempted from notifying the trusted contact person if that person is reasonably suspected of being the perpetrator of the financial exploitation.

Adım Adım Çözüm

1
Distinguish between disbursement holds and trade execution blocks under FINRA Rule 2165.
FINRA Rule 2165 allows broker-dealers to place a temporary hold on the disbursement of funds or securities out of an account when financial exploitation of a specified adult (age 65+ or 18+ with impairment) is reasonably suspected. It does not automatically permit blocking trade execution orders.
Freezing trade execution could expose the client to unintended market risks, whereas holding disbursements protects assets from being illicitly transferred out of the firm.
2
Analyze notification duties under FINRA Rule 2165 and Rule 4512.
When a temporary disbursement hold is initiated, the firm must provide notification (oral or written) within 2 business days to all authorized account holders and the designated trusted contact person.
Notification serves to alert authorized representatives and trusted advocates to protect the customer.
3
Apply the exception regarding suspicious trusted contact persons.
If the firm reasonably believes that the trusted contact person is involved in the financial exploitation, the firm is excused from notifying that specific individual.
Notifying a perpetrator of an ongoing exploitation investigation could lead to asset concealment or coercion of the vulnerable adult.

Anahtar Kavram

FINRA Rule 2165 Financial Exploitation Disbursement Holds & Rule 4512 Trusted Contact Exceptions
Tahmini Süre:1m 30s
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Konular

Financial Exploitation of Senior Investors and Vulnerable Adults