Florida Senate - 2020                                    SB 1672
       By Senator Broxson
       1-00955B-20                                           20201672__
    1                        A bill to be entitled                      
    2         An act relating to the protection of 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; providing legislative findings
   10         and intent; authorizing dealers and investment
   11         advisers to delay disbursements or transactions of
   12         funds or securities from certain accounts associated
   13         with specified adults if certain conditions are met;
   14         specifying the expiration of a delay; authorizing
   15         dealers and investment advisers to extend delays under
   16         certain circumstances; providing requirements for
   17         notifying the Office of Financial Regulation;
   18         authorizing a court of competent jurisdiction to
   19         shorten or extend a delay; requiring dealers and
   20         investment advisers to make certain records available
   21         to the office upon request; providing for
   22         administrative and civil immunity for dealers,
   23         investment advisers, and associated persons;
   24         specifying training and written procedures
   25         requirements for dealers and investment advisers
   26         before they may place a delay; providing for
   27         rulemaking by the Financial Services Commission;
   28         providing construction; providing an effective date.
   30  Be It Enacted by the Legislature of the State of Florida:
   32         Section 1. Paragraph (a) of subsection (1) of section
   33  415.1034, Florida Statutes, is amended to read:
   34         415.1034 Mandatory reporting of abuse, neglect, or
   35  exploitation of vulnerable adults; mandatory reports of death.—
   36         (1) MANDATORY REPORTING.—
   37         (a) Any person, including, but not limited to, any:
   38         1. Physician, osteopathic physician, medical examiner,
   39  chiropractic physician, nurse, paramedic, emergency medical
   40  technician, or hospital personnel engaged in the admission,
   41  examination, care, or treatment of vulnerable adults;
   42         2. Health professional or mental health professional other
   43  than one listed in subparagraph 1.;
   44         3. Practitioner who relies solely on spiritual means for
   45  healing;
   46         4. Nursing home staff; assisted living facility staff;
   47  adult day care center staff; adult family-care home staff;
   48  social worker; or other professional adult care, residential, or
   49  institutional staff;
   50         5. State, county, or municipal criminal justice employee or
   51  law enforcement officer;
   52         6. Employee of the Department of Business and Professional
   53  Regulation conducting inspections of public lodging
   54  establishments under s. 509.032;
   55         7. Florida advocacy council or Disability Rights Florida
   56  member or a representative of the State Long-Term Care Ombudsman
   57  Program; or
   58         8. Bank, savings and loan, or credit union officer,
   59  trustee, or employee; or
   60         9.Dealer, investment adviser, or associated person under
   61  chapter 517,
   63  who knows, or has reasonable cause to suspect, that a vulnerable
   64  adult has been or is being abused, neglected, or exploited must
   65  shall immediately report such knowledge or suspicion to the
   66  central abuse hotline.
   67         Section 2. Section 517.34, Florida Statutes, is created to
   68  read:
   69         517.34 Protection of specified adults.—
   70         (1)As used in this section, the term:
   71         (a)“Financial exploitation” means the wrongful or
   72  unauthorized taking, withholding, appropriation, or use of
   73  money, assets, or property of a specified adult; or any act or
   74  omission by a person, including through the use of a power of
   75  attorney, guardianship, or conservatorship of a specified adult,
   76  to:
   77         1.Obtain control over the specified adult’s money, assets,
   78  or property through deception, intimidation, or undue influence
   79  to deprive him or her of the ownership, use, benefit, or
   80  possession of the money, assets, or property; or
   81         2.Convert the specified adult’s money, assets, or property
   82  to deprive him or her of the ownership, use, benefit, or
   83  possession of the money, assets, or property.
   84         (b)“Specified adult” means a natural person 65 years of
   85  age or older, or a vulnerable adult as defined in s. 415.102.
   86         (c)“Trusted contact” means a natural person 18 years of
   87  age or older who the account owner has expressly identified and
   88  who is recorded in a dealer’s or investment adviser’s books and
   89  records as the person who may be contacted about the account.
   90         (2)The Legislature finds that many persons in this state,
   91  because of age or disability, are at increased risk of financial
   92  exploitation and loss of their assets, funds, investments, and
   93  investment accounts. The Legislature further finds that senior
   94  investors in this state are at a statistically higher risk of
   95  being targeted for financial exploitation, regardless of
   96  diminished capacity or other disability, because of their
   97  accumulation of substantial assets and wealth compared to
   98  younger age groups. In enacting this section, the Legislature
   99  recognizes the freedom of specified adults to manage their
  100  assets, make investment choices, and spend their funds, and
  101  intends that such rights may not be infringed absent a
  102  reasonable belief of financial exploitation as provided in this
  103  section. The Legislature therefore intends to provide for the
  104  prevention of financial exploitation of such persons. The
  105  Legislature intends to encourage the constructive involvement of
  106  securities dealers, investment advisers, and associated persons
  107  who take action based upon the reasonable belief that specified
  108  adults with investment accounts have been or are the subject of
  109  exploitation, and to provide securities dealers, investment
  110  advisers, and associated persons immunity from liability for
  111  taking actions as authorized herein. The Legislature intends to
  112  balance the rights of specified adults to direct and control
  113  their assets, funds, and investments and exercise their
  114  constitutional rights consistent with due process with the need
  115  to provide securities dealers, investment advisers, and
  116  associated persons the ability to place narrow, time-limited
  117  restrictions on these rights in an effort to decrease specified
  118  adults’ risk of loss due to abuse, neglect, or exploitation.
  119         (3)A dealer or investment adviser may delay a disbursement
  120  or transaction of funds or securities from an account of a
  121  specified adult or an account for which a specified adult is a
  122  beneficiary or beneficial owner if all of the following apply:
  123         (a)The dealer or investment adviser reasonably believes
  124  that financial exploitation of the specified adult has occurred,
  125  is occurring, has been attempted, or will be attempted in
  126  connection with the disbursement or transaction.
  127         (b)Not later than 3 business days after the date on which
  128  the delay was first placed, the dealer or investment adviser
  129  notifies in writing all parties authorized to transact business
  130  on the account and any trusted contact on the account, using the
  131  contact information provided for the account, with the exception
  132  of any party the dealer or investment adviser reasonably
  133  believes engaged or is engaging in the suspected financial
  134  exploitation of the specified adult. The notice, which may be
  135  provided electronically, must provide the reason for the delay.
  136         (c)Not later than 3 business days after the date on which
  137  the delay was first placed, the dealer or investment adviser
  138  notifies the office of the delay by telephone using a number
  139  designated by the office for such purpose or electronically on a
  140  form prescribed by commission rule. The notice must identify the
  141  dealer or investment adviser that made the delay, the name of
  142  the person who authorized the delay, and the date on which the
  143  delay was made.
  144         (d)The dealer or investment adviser immediately initiates
  145  an internal review of the facts and circumstances that caused
  146  the dealer or investment adviser to reasonably believe that the
  147  financial exploitation of the specified adult has occurred, is
  148  occurring, has been attempted, or will be attempted.
  149         (4)A delay on a disbursement or transaction under
  150  subsection (3) expires 15 business days after the date on which
  151  the delay was first placed. However, the dealer or investment
  152  adviser may extend the delay for up to 10 additional business
  153  days if the dealer’s or investment adviser’s review of the
  154  available facts and circumstances continues to support such
  155  dealer’s or investment adviser’s reasonable belief that
  156  financial exploitation of the specified adult has occurred, is
  157  occurring, has been attempted, or will be attempted. A dealer or
  158  investment adviser who extends a delay shall notify the office
  159  in accordance with paragraph (3)(c) not later than 3 business
  160  days after the date on which the extension was applied. The
  161  notice must identify the dealer or investment adviser that
  162  extended the delay and the date on which the delay was
  163  originally made. The length of the delay may be shortened or
  164  extended at any time by a court of competent jurisdiction. This
  165  subsection does not prevent a dealer or investment adviser from
  166  terminating a delay after communication with the parties
  167  authorized to transact business on the account and any trusted
  168  contact on the account.
  169         (5)A dealer or investment adviser must make available to
  170  the office, upon request, all records relating to a delay made
  171  by the dealer or investment adviser pursuant to this section, as
  172  prescribed by commission rule.
  173         (6)A dealer, an investment adviser, or an associated
  174  person who in good faith and exercising reasonable care complies
  175  with this section is immune from any administrative or civil
  176  liability that might otherwise arise from such delay in a
  177  disbursement or transaction in accordance with this section.
  178  This subsection does not supersede or diminish any immunity
  179  granted under chapter 415.
  180         (7)Before placing a delay on a disbursement or transaction
  181  pursuant to this section, a dealer or an investment adviser
  182  shall do all of the following:
  183         (a)Develop training policies or programs reasonably
  184  designed to educate associated persons on issues pertaining to
  185  financial exploitation.
  186         (b)Conduct training for all associated persons at least
  187  annually and maintain a written record of all trainings
  188  conducted.
  189         (c)Develop, maintain, and enforce written procedures
  190  regarding the manner in which suspected financial exploitation
  191  is reviewed internally, including, if applicable, the manner in
  192  which suspected financial exploitation is required to be
  193  reported to supervisory personnel.
  194         (8)Absent a reasonable belief of financial exploitation as
  195  provided in this section, this section does not alter a
  196  dealer’s, an investment adviser’s, or an associated person’s
  197  obligation to comply with instructions from a client to buy or
  198  sell securities, disburse funds or transfer securities from an
  199  account, close an account, or transfer an account to another
  200  dealer, investment adviser, or associated person.
  201         (9)This section does not create new rights for or impose
  202  new obligations on a dealer, an investment adviser, or an
  203  associated person under other applicable law. This section does
  204  not limit the right of a dealer, an investment adviser, or an
  205  associated person to otherwise refuse or place a delay on a
  206  disbursement or transaction under other applicable law or under
  207  an applicable customer agreement.
  208         Section 3. This act shall take effect July 1, 2020.