Florida Senate - 2020                             CS for SB 1672
       By the Committee on Judiciary; and Senators Broxson and Baxley
       590-03503-20                                          20201672c1
    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         specifying required information in the form for such
   19         notice; authorizing a court of competent jurisdiction
   20         to shorten or extend a delay; requiring dealers and
   21         investment advisers to make certain records available
   22         to the office upon request; providing for
   23         administrative and civil immunity for dealers,
   24         investment advisers, and associated persons;
   25         specifying training and written procedures
   26         requirements for dealers and investment advisers
   27         before they may place a delay; providing for
   28         rulemaking by the Financial Services Commission;
   29         providing construction; providing an effective date.
   31  Be It Enacted by the Legislature of the State of Florida:
   33         Section 1. Paragraph (a) of subsection (1) of section
   34  415.1034, Florida Statutes, is amended to read:
   35         415.1034 Mandatory reporting of abuse, neglect, or
   36  exploitation of vulnerable adults; mandatory reports of death.—
   37         (1) MANDATORY REPORTING.—
   38         (a) Any person, including, but not limited to, any:
   39         1. Physician, osteopathic physician, medical examiner,
   40  chiropractic physician, nurse, paramedic, emergency medical
   41  technician, or hospital personnel engaged in the admission,
   42  examination, care, or treatment of vulnerable adults;
   43         2. Health professional or mental health professional other
   44  than one listed in subparagraph 1.;
   45         3. Practitioner who relies solely on spiritual means for
   46  healing;
   47         4. Nursing home staff; assisted living facility staff;
   48  adult day care center staff; adult family-care home staff;
   49  social worker; or other professional adult care, residential, or
   50  institutional staff;
   51         5. State, county, or municipal criminal justice employee or
   52  law enforcement officer;
   53         6. Employee of the Department of Business and Professional
   54  Regulation conducting inspections of public lodging
   55  establishments under s. 509.032;
   56         7. Florida advocacy council or Disability Rights Florida
   57  member or a representative of the State Long-Term Care Ombudsman
   58  Program; or
   59         8. Bank, savings and loan, or credit union officer,
   60  trustee, or employee; or
   61         9.Dealer, investment adviser, or associated person under
   62  chapter 517,
   64  who knows, or has reasonable cause to suspect, that a vulnerable
   65  adult has been or is being abused, neglected, or exploited must
   66  shall immediately report such knowledge or suspicion to the
   67  central abuse hotline.
   68         Section 2. Section 517.34, Florida Statutes, is created to
   69  read:
   70         517.34 Protection of specified adults.—
   71         (1)As used in this section, the term:
   72         (a)“Financial exploitation” means the wrongful or
   73  unauthorized taking, withholding, appropriation, or use of
   74  money, assets, or property of a specified adult; or any act or
   75  omission by a person, including through the use of a power of
   76  attorney, guardianship, or conservatorship of a specified adult,
   77  to:
   78         1.Obtain control over the specified adult’s money, assets,
   79  or property through deception, intimidation, or undue influence
   80  to deprive him or her of the ownership, use, benefit, or
   81  possession of the money, assets, or property; or
   82         2.Convert the specified adult’s money, assets, or property
   83  to deprive him or her of the ownership, use, benefit, or
   84  possession of the money, assets, or property.
   85         (b)“Specified adult” means a natural person 65 years of
   86  age or older, or a vulnerable adult as defined in s. 415.102.
   87         (c)“Trusted contact” means a natural person 18 years of
   88  age or older who the account owner has expressly identified and
   89  who is recorded in a dealer’s or investment adviser’s books and
   90  records as the person who may be contacted about the account.
   91         (2)The Legislature finds that many persons in this state,
   92  because of age or disability, are at increased risk of financial
   93  exploitation and loss of their assets, funds, investments, and
   94  investment accounts. The Legislature further finds that senior
   95  investors in this state are at a statistically higher risk of
   96  being targeted for financial exploitation, regardless of
   97  diminished capacity or other disability, because of their
   98  accumulation of substantial assets and wealth compared to
   99  younger age groups. In enacting this section, the Legislature
  100  recognizes the freedom of specified adults to manage their
  101  assets, make investment choices, and spend their funds, and
  102  intends that such rights may not be infringed absent a
  103  reasonable belief of financial exploitation as provided in this
  104  section. The Legislature therefore intends to provide for the
  105  prevention of financial exploitation of such persons. The
  106  Legislature intends to encourage the constructive involvement of
  107  securities dealers, investment advisers, and associated persons
  108  who take action based upon the reasonable belief that specified
  109  adults with investment accounts have been or are the subject of
  110  financial exploitation, and to provide securities dealers,
  111  investment advisers, and associated persons immunity from
  112  liability for taking actions as authorized herein. The
  113  Legislature intends to balance the rights of specified adults to
  114  direct and control their assets, funds, and investments and
  115  exercise their constitutional rights consistent with due process
  116  with the need to provide securities dealers, investment
  117  advisers, and associated persons the ability to place narrow,
  118  time-limited restrictions on these rights in an effort to
  119  decrease specified adults’ risk of loss due to abuse, neglect,
  120  or financial exploitation.
  121         (3)A dealer or investment adviser may delay a disbursement
  122  or transaction of funds or securities from an account of a
  123  specified adult or an account for which a specified adult is a
  124  beneficiary or beneficial owner if all of the following apply:
  125         (a)The dealer or investment adviser reasonably believes
  126  that financial exploitation of the specified adult has occurred,
  127  is occurring, has been attempted, or will be attempted in
  128  connection with the disbursement or transaction.
  129         (b)Not later than 3 business days after the date on which
  130  the delay was first placed, the dealer or investment adviser
  131  notifies in writing all parties authorized to transact business
  132  on the account and any trusted contact on the account, using the
  133  contact information provided for the account, with the exception
  134  of any party the dealer or investment adviser reasonably
  135  believes has engaged in, is engaging in, has attempted to engage
  136  in, or will attempt to engage in the suspected financial
  137  exploitation of the specified adult. The notice, which may be
  138  provided electronically, must provide the reason for the delay.
  139         (c)Not later than 3 business days after the date on which
  140  the delay was first placed, the dealer or investment adviser
  141  notifies the office of the delay electronically on a form
  142  prescribed by commission rule. The form must be consistent with
  143  the purposes of this section and may include only the following
  144  information:
  145         1.The date the notification is submitted to the office.
  146         2.The date on which the delay was first placed.
  147         3.The following information about the specified adult:
  148         a.Gender.
  149         b.Age.
  150         c.Zip code of residence address.
  151         4.The following information about the dealer or investment
  152  adviser who placed the delay:
  153         a.Name.
  154         b.Title.
  155         c.Firm name.
  156         d.Business address.
  157         5.A section with the following questions for which the
  158  only allowable responses are “Yes” or “No”:
  159         a.Is financial exploitation of a specified adult suspected
  160  in connection with a transaction or disbursement?
  161         b.Are funds currently at risk of being lost?
  163  The form must contain substantially the following statement in
  164  conspicuous type: “The office may take disciplinary action
  165  against any person making a knowing and willful
  166  misrepresentation on this form.”
  167         (d)The dealer or investment adviser immediately initiates
  168  an internal review of the facts and circumstances that caused
  169  the dealer or investment adviser to reasonably believe that the
  170  financial exploitation of the specified adult has occurred, is
  171  occurring, has been attempted, or will be attempted.
  172         (4)A delay on a disbursement or transaction under
  173  subsection (3) expires 15 business days after the date on which
  174  the delay was first placed. However, the dealer or investment
  175  adviser may extend the delay for up to 10 additional business
  176  days if the dealer’s or investment adviser’s review of the
  177  available facts and circumstances continues to support such
  178  dealer’s or investment adviser’s reasonable belief that
  179  financial exploitation of the specified adult has occurred, is
  180  occurring, has been attempted, or will be attempted. A dealer or
  181  investment adviser that extends a delay shall notify the office
  182  on a form prescribed by commission rule not later than 3
  183  business days after the date on which the extension was applied.
  184  The notice must identify the dealer or investment adviser that
  185  extended the delay and the date on which the delay was
  186  originally made. The length of the delay may be shortened or
  187  extended at any time by a court of competent jurisdiction. This
  188  subsection does not prevent a dealer or investment adviser from
  189  terminating a delay after communication with the parties
  190  authorized to transact business on the account and any trusted
  191  contact on the account.
  192         (5)A dealer or investment adviser must make available to
  193  the office, upon request, all records relating to a delay placed
  194  by the dealer or investment adviser pursuant to this section, as
  195  prescribed by commission rule.
  196         (6)A dealer, an investment adviser, or an associated
  197  person who in good faith and exercising reasonable care complies
  198  with this section is immune from any administrative or civil
  199  liability that might otherwise arise from such delay in a
  200  disbursement or transaction in accordance with this section.
  201  This subsection does not supersede or diminish any immunity
  202  granted under chapter 415.
  203         (7)Before placing a delay on a disbursement or transaction
  204  pursuant to this section, a dealer or an investment adviser
  205  shall do all of the following:
  206         (a)Develop training policies or programs reasonably
  207  designed to educate associated persons on issues pertaining to
  208  financial exploitation.
  209         (b)Conduct training for all associated persons at least
  210  annually and maintain a written record of all trainings
  211  conducted.
  212         (c)Develop, maintain, and enforce written procedures
  213  regarding the manner in which suspected financial exploitation
  214  is reviewed internally, including, if applicable, the manner in
  215  which suspected financial exploitation is required to be
  216  reported to supervisory personnel.
  217         (8)Absent a reasonable belief of financial exploitation as
  218  provided in this section, this section does not alter a
  219  dealer’s, an investment adviser’s, or an associated person’s
  220  obligation to comply with instructions from a client to buy or
  221  sell securities, disburse funds or transfer securities from an
  222  account, close an account, or transfer an account to another
  223  dealer, investment adviser, or associated person.
  224         (9)This section does not create new rights for or impose
  225  new obligations on a dealer, an investment adviser, or an
  226  associated person under other applicable law. This section does
  227  not limit the right of a dealer, an investment adviser, or an
  228  associated person to otherwise refuse or place a delay on a
  229  disbursement or transaction under other applicable law or under
  230  an applicable customer agreement.
  231         Section 3. This act shall take effect July 1, 2020.