Florida Senate - 2018 CS for SB 662 By the Committee on Commerce and Tourism; and Senators Stargel and Taddeo 577-03439-18 2018662c1 1 A bill to be entitled 2 An act relating to protection for vulnerable 3 investors; amending s. 415.1034, F.S.; requiring 4 securities dealers, investment advisers, and 5 associated persons to immediately report knowledge or 6 suspicion of abuse, neglect, or exploitation of 7 vulnerable adults to the Department of Children and 8 Families’ central abuse hotline; creating s. 517.34, 9 F.S.; defining terms; authorizing dealers, investment 10 advisers, and associated persons to delay certain 11 transactions or disbursements if such persons 12 reasonably believe certain exploitation of a specified 13 adult has occurred, is occurring, has been attempted, 14 or will be attempted; providing the basis for such 15 reasonable belief; requiring a dealer or investment 16 adviser to provide the Office of Financial Regulation 17 a specified notice at certain timeframes; requiring 18 the Financial Services Commission to adopt a form by 19 rule; requiring the office to submit an annual report 20 to the Governor and Legislature; providing for 21 expiration; specifying notification requirements for 22 dealers, investment advisers, and associated persons 23 placing delays on transactions or disbursements; 24 specifying the expiration of such delays; providing 25 that such delays may be extended for a certain 26 timeframe under certain circumstances; providing that 27 such delays may be shortened or extended by an agency 28 or court of competent jurisdiction; providing that 29 delays may be terminated by dealers, investment 30 advisers, or associated persons under certain 31 circumstances; specifying when certain records may or 32 must be shared with certain agencies; authorizing the 33 Department of Children and Families to inform 34 reporting parties on the status of an investigation; 35 providing immunity from civil and administrative 36 liability to dealers, investment advisers, and 37 associated persons for certain actions based on a 38 reasonable belief; specifying requirements for dealers 39 and investment advisers in training their associated 40 persons; providing construction; providing an 41 effective date. 42 43 Be It Enacted by the Legislature of the State of Florida: 44 45 Section 1. Paragraph (a) of subsection (1) of section 46 415.1034, Florida Statutes, is amended to read: 47 415.1034 Mandatory reporting of abuse, neglect, or 48 exploitation of vulnerable adults; mandatory reports of death.— 49 (1) MANDATORY REPORTING.— 50 (a) Any person, including, but not limited to, any: 51 1. Physician, osteopathic physician, medical examiner, 52 chiropractic physician, nurse, paramedic, emergency medical 53 technician, or hospital personnel engaged in the admission, 54 examination, care, or treatment of vulnerable adults; 55 2. Health professional or mental health professional other 56 than one listed in subparagraph 1.; 57 3. Practitioner who relies solely on spiritual means for 58 healing; 59 4. Nursing home staff; assisted living facility staff; 60 adult day care center staff; adult family-care home staff; 61 social worker; or other professional adult care, residential, or 62 institutional staff; 63 5. State, county, or municipal criminal justice employee or 64 law enforcement officer; 65 6. Employee of the Department of Business and Professional 66 Regulation conducting inspections of public lodging 67 establishments under s. 509.032; 68 7. Florida advocacy council or Disability Rights Florida 69 member or a representative of the State Long-Term Care Ombudsman 70 Program;
or71 8. Bank, savings and loan, or credit union officer, 72 trustee, or employee; or 73 9. Dealer, investment adviser, or associated person under 74 chapter 517, 75 76 who knows, or has reasonable cause to suspect, that a vulnerable 77 adult has been or is being abused, neglected, or exploited shall 78 immediately report such knowledge or suspicion to the central 79 abuse hotline. 80 Section 2. Section 517.34, Florida Statutes, is created to 81 read: 82 517.34 Protection of specified adults.— 83 (1) As used in this section, the term: 84 (a)1. “Exploitation” means: 85 a. With respect to a person who stands in a position of 86 trust and confidence with a specified adult, who knowingly, by 87 deception or intimidation, obtains or uses, or endeavors to 88 obtain or use, the specified adult’s funds, assets, or property 89 with the intent to temporarily or permanently deprive the 90 specified adult of the use, benefit, or possession of the funds, 91 assets, or property for the benefit of someone other than the 92 specified adult; or 93 b. With respect to a person who knows or should know that a 94 specified adult lacks the capacity to consent, who obtains or 95 uses, or endeavors to obtain or use, the specified adult’s 96 funds, assets, or property with the intent to temporarily or 97 permanently deprive the specified adult of the use, benefit, or 98 possession of the funds, assets, or property for the benefit of 99 someone other than the specified adult. 100 2. “Exploitation” may include, but is not limited to: 101 a. A breach of a fiduciary relationship, such as the misuse 102 of a power of attorney or the abuse of guardianship duties 103 resulting in the unauthorized appropriation, sale, or transfer 104 of property; 105 b. An unauthorized taking of personal assets; 106 c. Misappropriation, misuse, or transfer of moneys 107 belonging to a specified adult from a personal or joint account; 108 or 109 d. Intentional or negligent failure to effectively use a 110 specified adult’s income and assets for the necessities required 111 for that person’s support and maintenance. 112 (b) “Law enforcement agency” means an agency or political 113 subdivision of this state or of the United States whose primary 114 responsibility is the prevention and detection of crime or the 115 enforcement of the penal laws of this state or the United States 116 and whose agents and officers are empowered by law to conduct 117 criminal investigations or to make arrests. 118 (c) “Specified adult” means a natural person 65 years of 119 age or older or a vulnerable adult as defined in s. 415.102. 120 (d) “Trusted contact” means a natural person 18 years of 121 age or older whom the account owner has expressly identified in 122 writing as a person who may be contacted about the account. 123 (2) A dealer, investment adviser, or associated person may 124 delay a transaction on, or a disbursement of funds or securities 125 from, an account of a specified adult or an account for which a 126 specified adult is a beneficiary or beneficial owner if the 127 dealer, investment adviser, or associated person reasonably 128 believes that exploitation of the specified adult has occurred, 129 is occurring, has been attempted, or will be attempted in 130 connection with the transaction or disbursement. 131 (a) The dealer’s, investment adviser’s, or associated 132 person’s reasonable belief may be based on the facts and 133 circumstances observed in such dealer’s, investment adviser’s, 134 or associated person’s business relationship with the specified 135 adult. 136 (b)1. A dealer or investment adviser must notify the 137 office, on a quarterly basis and on a form adopted by commission 138 rule, of every delay he or she places and the outcome of such 139 delay. The notice may not directly or indirectly identify the 140 specified adult or the parties to the transaction or 141 disbursement. The notice must include: 142 a. The name of the firm and dealer, investment adviser, or 143 associated person placing the delay on the transaction or 144 disbursement. 145 b. A general description of the reason why the dealer, 146 investment adviser, or associated person placed the delay on the 147 transaction or disbursement. 148 c. The length of the delay on the transaction or 149 disbursement and whether or not the transaction or disbursement 150 ultimately took place. 151 2. On or before October 1 of each year, the office must 152 submit a report to the Governor, the President of the Senate, 153 and the Speaker of the House of Representatives summarizing the 154 information provided to the office by dealers, investment 155 advisers, and associated persons under subparagraph 1. during 156 the prior fiscal year. This subparagraph expires October 1, 157 2023. 158 (c)1. Within 3 business days after the date on which the 159 delay was first placed, the dealer, investment adviser, or 160 associated person must notify in writing, which may be provided 161 electronically, all parties authorized to transact business on 162 the account and any trusted contact on the account, using the 163 contact information provided for the account, unless the dealer, 164 investment adviser, or associated person reasonably believes 165 that any such party engaged or is engaging in the suspected 166 exploitation of the specified adult. 167 2. The notice provided pursuant to this paragraph must 168 include, at a minimum, a description of the transaction or 169 disbursement, a statement that a delay was placed on such 170 transaction or disbursement pursuant to this section, the basis 171 for the reasonable belief regarding exploitation of the 172 specified adult, and an explanation of the delay process. 173 (3) A delay on a transaction or disbursement under 174 subsection (2) expires 15 business days after the date on which 175 the delay was first placed. However, a dealer, investment 176 adviser, or associated person may extend the delay for up to 10 177 additional business days if its review of the available facts 178 and circumstances continues to support its reasonable belief 179 that exploitation of the specified adult has occurred, is 180 occurring, has been attempted, or will be attempted. The length 181 of the delay may be shortened or extended at any time by an 182 agency or court of competent jurisdiction. This subsection does 183 not prevent a dealer, investment adviser, or associated person 184 from terminating a delay after communication with the specified 185 adult or trusted contact. 186 (4) A dealer, investment adviser, or associated person may 187 provide access to or copies of any records that are relevant to 188 the suspected exploitation of a specified adult to the 189 Department of Children and Families or a law enforcement agency 190 at their request. The records may include records of prior 191 transactions or disbursements, in addition to the transactions 192 or disbursements comprising the suspected exploitation. A 193 dealer, investment adviser, or associated person subject to the 194 jurisdiction of the office must make available to the office, 195 upon request, all records relating to a delay or report made by 196 the dealer, investment adviser, or associated person pursuant to 197 this section. 198 (5) Notwithstanding any law to the contrary, the Department 199 of Children and Families may inform the reporting party on the 200 status of an investigation initiated under this section and any 201 final disposition. 202 (6) A dealer, investment adviser, or associated person who 203 delays a transaction or disbursement pursuant to this section, 204 who provides records to an agency of competent jurisdiction 205 pursuant to this section, or who participates in a judicial or 206 arbitration proceeding resulting therefrom is presumed to be 207 acting based upon a reasonable belief and is immune from any 208 civil or administrative liability that otherwise might be 209 incurred or imposed, unless lack of such reasonable belief is 210 shown by clear and convincing evidence. This subsection does not 211 supersede or diminish any immunity in chapter 415. 212 (7) A dealer or investment adviser relying on this section 213 must develop training policies or programs designed to educate 214 associated persons on issues pertaining to exploitation and must 215 conduct training of all associated persons accordingly. The 216 dealer or investment adviser must initially train all of its 217 associated persons by July 1, 2019, must train any newly hired 218 associated persons within 3 months after beginning employment, 219 and must subsequently train all associated persons every 2 years 220 thereafter. The training policies and programs must provide for 221 the associated person to receive a minimum of 1 hour of such 222 training, which must include recognition of indicators of 223 exploitation, the manner in which suspected exploitation must be 224 reported to supervisory personnel and to the appropriate 225 regulatory and law enforcement agencies, and steps that may be 226 taken to prevent exploitation. The dealer or investment adviser 227 must maintain a written record of compliance with this 228 subsection. 229 (8) This section does not create new rights or obligations 230 of a dealer, investment adviser, or associated person under 231 other applicable laws or rules. In addition, this section does 232 not limit the right of a dealer, investment adviser, or 233 associated person to otherwise refuse or place a delay on a 234 transaction or disbursement under other applicable laws or rules 235 or under an applicable customer agreement. 236 (9) This section does not alter a dealer’s, investment 237 adviser’s, or associated person’s obligation to comply with 238 instructions from a client to close an account or transfer an 239 account to another dealer, investment adviser, or associated 240 person absent a reasonable belief of exploitation as provided in 241 this section. 242 Section 3. This act shall take effect July 1, 2018.