Bill Text: FL S0662 | 2018 | Regular Session | Comm Sub


Bill Title: Protection for Vulnerable Investors

Spectrum:

Status: (Introduced - Dead) 2018-03-10 - Died on Calendar [S0662 Detail]

Download: Florida-2018-S0662-Comm_Sub.html
       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; or
   71         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.

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