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Zorluk: OrtaFinancial Exploitation of Senior Investors and Vulnerable Adults

An 80-year-old investor instructs her broker-dealer to sell $100,000 of blue-chip stock in her account and immediately wire the cash proceeds to an unfamiliar third-party account. The registered representative suspects that the investor is a victim of financial exploitation. Under FINRA Rule 2165 and Rule 4512, which of the following actions is the broker-dealer permitted to take?

  1. Execute the trade order to sell the stock, but place a temporary hold on the wire disbursement while initiating an internal review.Cevap
  2. B
    Place a temporary hold on both the stock sale order and the wire disbursement until an independent medical assessment is provided.
  3. C
    Freeze all trading activity in the account and transfer the cash proceeds directly to state securities regulators within 15 business days.
  4. D
    Cancel the stock sale order and place a permanent hold on all account assets until a court designates a legal guardian.

Cevap

Execute the trade order to sell the stock, but place a temporary hold on the wire disbursement while initiating an internal review.
Under FINRA Rule 2165, broker-dealers may place a temporary hold on the disbursement of funds or securities from the account of a Specified Adult (persons aged 65 and older, or aged 18 and older with physical or mental impairments) when financial exploitation is reasonably suspected. However, Rule 2165 does not allow firms to freeze or refuse trade execution orders. Therefore, the firm must execute the stock sale as instructed but can place a temporary hold on the outgoing wire disbursement.

Adım Adım Çözüm

1
Identify the scope of FINRA Rule 2165 regarding specified adults.
The investor is 80 years old, qualifying as a specified adult (age 65+ or 18+ with impairment).
FINRA Rule 2165 applies to specified adults when reasonable grounds exist to suspect financial exploitation.
2
Distinguish between trade execution and fund disbursement under FINRA Rule 2165.
Rule 2165 authorizes a broker-dealer to place a temporary hold on the disbursement of funds or securities, but does NOT authorize freezing trade orders.
Holding disbursements protects cash from leaving the firm, while refusing to execute trades could cause unwanted market risk or breach execution duties.
3
Select the compliant firm action.
The firm must execute the requested stock liquidation while placing a temporary hold on the wire transfer disbursement.
This complies with both trade execution standards and FINRA Rule 2165 disbursement hold authority.

Anahtar Kavram

FINRA Rule 2165 Temporary Hold on Disbursements vs. Trade Execution
Tahmini Süre:1m 15s
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Konular

Financial Exploitation of Senior Investors and Vulnerable Adults