New weapons to fight financial fraud against older Americans


Brokers now have a couple of new weapons to help them battle financial fraud against older Americans.
One rule, which takes effect Monday, allows brokers to put a temporary hold on a requested account withdrawal if financial exploitation is suspected.
“A lot of times, advisors haven’t had the ability to stop a suspicious transaction,” said Marve Ann Alaimo, a partner at the law firm Porter Wright Morris & Arthur in Naples, Florida.
“This, at least, lets them protect their clients and put it on hold until they can verify if it’s a valid transaction,” Alaimo said.
Separately, an amendment to an existing securities rule will now require brokers to ask customers for a trusted person the advisor can reach out to if fraud or mental decline is suspected. The request for a trusted contact will be made either when accounts are opened or when brokers are updating information for existing clients.
Both changes, which were approved a year ago and are governed by the Financial Industry Regulatory Authority, the self-funded regulator for the brokerage industry, aim to tackle the growing issue of elder fraud.