New Legislation Protects Vulnerable Adults from Financial Exploitation

NASHVILLE – Tennessee seniors and other vulnerable adults will gain more protection from financial abuse and fraud with the recent passage of new legislation that was signed into law by Governor Bill Haslam on May 18, 2017.  

The Senior Financial Protection & Securities Modernization Act, enacted as Public Chapter No. 424, aims to safeguard senior adults (age 65 or older), and others at increased risk of diminished capacity or other cognitive impairment, by providing the Tennessee Department of Commerce and Insurance’s (TDCI) Securities Division and the securities industry with greater tools to help detect and prevent financial exploitation.

“This legislation toughens the necessary protections for seniors and vulnerable adults from financial abuse and exploitation,” said TDCI Assistant Commissioner for Securities Frank Borger-Gilligan. “Evidence suggests that as many as one out of every five citizens over the age of 65 has been victimized by a financial fraud. To combat this type of abuse, we must work with those who are best positioned to spot the red flags of financial exploitation early on, and encourage reporting and referrals to the Tennessee Securities Division.”

The Act urges members of the securities industry to report suspected financial abuse of seniors and other vulnerable adults by providing civil and administrative immunity to broker-dealers, investment advisers, agents, representatives, and other qualified individuals for reporting the suspected abuse or exploitation to the Tennessee Securities Division.  It also allows those financial professionals to delay disbursements from an account for up to 15 days if financial abuse or exploitation is suspected and authorizes notification to third parties in instances where a designated adult has previously designated the third party to whom disclosures should be made. 

Additionally, the Act provides for the ability to impose enhanced civil penalties when victims are 65 years of age or older or 18 years of age or older who, because of mental or physical dysfunction, is unable to manage such person’s own resources, carry out activities of daily living, or protect such person from neglect, hazardous or abusive situations without assistance from others.  The updated penalties are double the amount of former civil penalties.

The new legislation simplifies the process of securities registration for industry members and provides necessary revisions to the 1980 Tennessee Securities Act that are more consistent with both federal regulation and other states’ securities laws, including the implementation of fees for various securities exemption renewal filings which are common in other states, but have not been required in Tennessee.  

The legislation also modernizes various portions of the 1980 Tennessee Securities Act in order to provide more effective and efficient regulatory oversight of the securities industry. 

Tennesseans can learn more about the Securities Division by visiting TDCI’s website where they can inspect disciplinary actions and verify licenses of securities and insurance professionals.

If you suspect that you might be a victim of securities or insurance fraud, or if you would like to file a complaint or speak with an investigator, please contact the Tennessee Securities Division – Financial
Services Investigations Unit at (615) 741-5900. To file a complaint online, visit https://tn.gov/commerce/article/securities-file-a-complaint.