On December 13, 2023 Michigan became the latest state to enact legislation to protect elder and vulnerable adults from financial exploitation. Effective March 13, 2024, the new law requires broker-dealers and state-registered investment advisers to report suspected financial exploitation to a law enforcement agency or adult protective services. However, a broker-dealer or investment adviser is not required to make a report of suspected covered financial exploitation if the broker-dealer or investment adviser investigates or examines the available facts and determines that covered financial exploitation has not occurred or is not occurring and no action is necessary.
Michigan’s law also permits firms to delay disbursements or transactions from an account owned by an eligible adult or an account on which an eligible adult is a beneficiary if certain conditions are met. Not more than 2 business days after the date that the broker-dealer or investment adviser first placed the delay on the disbursement or transaction, the broker-dealer or investment adviser must provide written notification of the reason for the delay to all of the following: (a) The Administrator (Office of Financial and Insurance Regulation of the Department of Energy, Labor, and Economic Growth); (b) either adult protective services or a law enforcement agency; (c) all persons who are authorized to transact business on the account; and (d) any individual who the client or customer has previously designated as authorized to receive information about the account.
Firms that take action pursuant to these provisions in good faith and exercising reasonable care are granted civil and administrative immunity.
Further details and other state statutes in this area can be found in Bressler’s Interactive Senior and Vulnerable Investor Issues Map.