S T A T E O F N E W Y O R K
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9275
I N A S S E M B L Y
February 10, 2016
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Introduced by M. of A. CLARK, ENGLEBRIGHT, JAFFEE, SEPULVEDA, McDONOUGH,
MILLER, RAIA, COOK, DAVILA, GOTTFRIED, DINOWITZ, SIMON, KEARNS, SCHIM-
MINGER, JOYNER, COLTON, LIFTON, STECK, GIGLIO, PEOPLES-STOKES, GRAF,
OTIS -- Multi-Sponsored by -- M. of A. TITONE -- read once and
referred to the Committee on Banks
AN ACT to amend the banking law, in relation to enacting the protect
vulnerable adults from financial exploitation act
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. This act shall be known and may be cited as the "protect
vulnerable adults from financial exploitation act".
S 2. The banking law is amended by adding a new section 9-x to read as
follows:
S 9-X. REPORTING OF SUSPECTED FINANCIAL EXPLOITATION. 1. FOR PURPOSES
OF THIS SECTION, THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEANINGS:
(A) "AGENT" MEANS ANY PERSON ACTING AT THE DIRECTION OF OR ON BEHALF
OF AN INDIVIDUAL OR BUSINESS;
(B) "BROKER-DEALER" MEANS ANY PERSON ENGAGED IN THE BUSINESS OF
EFFECTING TRANSACTIONS IN SECURITIES FOR THE ACCOUNT OF OTHERS OR FOR
THAT PERSON'S OWN ACCOUNT;
(C) "ELIGIBLE ADULT" MEANS:
(I) A PERSON SIXTY YEARS OF AGE OR OLDER; OR
(II) A PERSON WHO BECAUSE OF MENTAL AND/OR PHYSICAL IMPAIRMENT, IS
UNABLE TO MANAGE HIS OR HER OWN RESOURCES, OR PROTECT HIMSELF OR HERSELF
FROM FINANCIAL EXPLOITATION.
(D) "FINANCIAL EXPLOITATION" MEANS:
(I) THE WRONGFUL OR UNAUTHORIZED TAKING, WITHHOLDING, APPROPRIATION,
OR USE OF MONEY, ASSETS OR PROPERTY OF AN ELIGIBLE ADULT; OR
(II) ANY ACT OR OMISSION TAKEN BY A PERSON, INCLUDING THROUGH THE USE
OF A POWER OF ATTORNEY OR GUARDIANSHIP OF AN ELIGIBLE ADULT, TO:
(A) OBTAIN CONTROL, THROUGH DECEPTION, INTIMIDATION OR UNDUE INFLU-
ENCE, OVER THE ELIGIBLE ADULT'S MONEY, ASSETS OR PROPERTY TO DEPRIVE THE
ELIGIBLE ADULT OF THE OWNERSHIP, USE, BENEFIT OR POSSESSION OF HIS OR
HER MONEY, ASSETS OR PROPERTY; OR
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD13616-01-6
A. 9275 2
(B) CONVERT MONEY, ASSETS OR PROPERTY OF THE ELIGIBLE ADULT TO DEPRIVE
SUCH ELIGIBLE ADULT OF THE OWNERSHIP, USE, BENEFIT OR POSSESSION OF HIS
OR HER MONEY, ASSETS OR PROPERTY.
(E) "INVESTMENT ADVISER" MEANS ANY PERSON WHO, FOR COMPENSATION,
ENGAGES IN THE BUSINESS OF ADVISING OTHERS, EITHER DIRECTLY OR THROUGH
PUBLICATIONS OR WRITINGS, AS TO THE VALUE OF SECURITIES OR AS TO THE
ADVISABILITY OF INVESTING IN, PURCHASING, OR SELLING SECURITIES, OR WHO,
FOR COMPENSATION AND AS A PART OF A REGULAR BUSINESS, ISSUES OR PROMUL-
GATES ANALYSES OR REPORTS CONCERNING SECURITIES. "INVESTMENT ADVISER"
ALSO INCLUDES FINANCIAL PLANNERS AND OTHER PERSONS WHO, AS AN INTEGRAL
COMPONENT OF OTHER FINANCIALLY RELATED SERVICES, (I) PROVIDE THE FOREGO-
ING INVESTMENT ADVISORY SERVICES TO OTHERS FOR COMPENSATION AS PART OF A
BUSINESS OR (II) HOLD THEMSELVES OUT AS PROVIDING THE FOREGOING INVEST-
MENT ADVISORY SERVICES TO OTHERS FOR COMPENSATION. INVESTMENT ADVISER
SHALL ALSO INCLUDE ANY PERSON WHO HOLDS HIMSELF OR HERSELF OUT AS A
FINANCIAL PLANNER.
(F) "QUALIFIED EMPLOYEE" MEANS ANY AGENT, INVESTMENT ADVISER REPRESEN-
TATIVE OR PERSON WHO SERVES IN A SUPERVISORY, COMPLIANCE, OR LEGAL
CAPACITY FOR A BROKER-DEALER OR INVESTMENT ADVISER.
2. (A) IF A QUALIFIED EMPLOYEE REASONABLY BELIEVES THAT FINANCIAL
EXPLOITATION OF AN ELIGIBLE ADULT MAY HAVE OCCURRED, MAY HAVE BEEN
ATTEMPTED, OR IS BEING ATTEMPTED, THE QUALIFIED EMPLOYEE SHALL PROMPTLY
NOTIFY THE LOCAL SOCIAL SERVICES DISTRICT PROVIDING ADULT PROTECTIVE
SERVICES PURSUANT TO SECTION FOUR HUNDRED SEVENTY-THREE OF THE SOCIAL
SERVICES LAW AND THE SUPERINTENDENT OF FINANCIAL SERVICES.
(B) A QUALIFIED EMPLOYEE THAT IN GOOD FAITH AND EXERCISING REASONABLE
CARE MAKES A DISCLOSURE OF INFORMATION PURSUANT TO THIS SUBDIVISION
SHALL BE IMMUNE FROM ADMINISTRATIVE OR CIVIL LIABILITY THAT MIGHT OTHER-
WISE ARISE FROM SUCH DISCLOSURE OR FOR ANY FAILURE TO NOTIFY THE CUSTOM-
ER OF THE DISCLOSURE.
3. (A) IF A QUALIFIED EMPLOYEE REASONABLY BELIEVES THAT FINANCIAL
EXPLOITATION OF AN ELIGIBLE ADULT MAY HAVE OCCURRED, MAY HAVE BEEN
ATTEMPTED, OR IS BEING ATTEMPTED, A QUALIFIED EMPLOYEE MAY NOTIFY ANY
THIRD PARTY PREVIOUSLY DESIGNATED BY THE ELIGIBLE ADULT. DISCLOSURE MAY
NOT BE MADE TO ANY DESIGNATED THIRD PARTY THAT IS SUSPECTED OF FINANCIAL
EXPLOITATION OR OTHER ABUSE OF THE ELIGIBLE ADULT.
(B) A QUALIFIED EMPLOYEE THAT, IN GOOD FAITH AND EXERCISING REASONABLE
CARE, COMPLIES WITH THIS SUBDIVISION SHALL BE IMMUNE FROM ANY ADMINIS-
TRATIVE OR CIVIL LIABILITY THAT MIGHT OTHERWISE ARISE FROM SUCH DISCLO-
SURE.
4. (A) A BROKER-DEALER OR INVESTMENT ADVISER MAY DELAY A DISBURSEMENT
FROM AN ACCOUNT OF AN ELIGIBLE ADULT OR AN ACCOUNT ON WHICH AN ELIGIBLE
ADULT IS A BENEFICIARY IF:
(I) THE BROKER-DEALER, INVESTMENT ADVISER, OR QUALIFIED EMPLOYEE
REASONABLY BELIEVES THAT THE REQUESTED DISBURSEMENT WILL RESULT IN
FINANCIAL EXPLOITATION OF AN ELIGIBLE ADULT; AND
(II) THE BROKER-DEALER OR INVESTMENT ADVISER:
(A) IMMEDIATELY, BUT IN NO EVENT MORE THAN TWO BUSINESS DAYS AFTER THE
REQUESTED DISBURSEMENT PROVIDES WRITTEN NOTIFICATION OF THE DELAY AND
THE REASON FOR THE DELAY TO ALL PARTIES AUTHORIZED TO TRANSACT BUSINESS
ON THE ACCOUNT, UNLESS ANY SUCH PARTY IS REASONABLY BELIEVED TO HAVE
ENGAGED IN SUSPECTED OR ATTEMPTED FINANCIAL EXPLOITATION OF THE ELIGIBLE
ADULT;
(B) IMMEDIATELY, BUT IN NO EVENT MORE THAN TWO BUSINESS DAYS AFTER THE
REQUESTED DISBURSEMENT, NOTIFIES THE AGENCIES REQUIRED IN SUBDIVISION
TWO OF THIS SECTION; AND
A. 9275 3
(C) IMMEDIATELY INITIATES AN INTERNAL REVIEW OF THE SUSPECTED OR
ATTEMPTED FINANCIAL EXPLOITATION OF THE ELIGIBLE ADULT AND REPORTS ANY
RESULTS TO THE AGENCIES REQUIRED TO BE NOTIFIED IN SUBDIVISION TWO OF
THIS SECTION WITHIN SEVEN BUSINESS DAYS.
(B) ANY DELAY OF A DISBURSEMENT AS AUTHORIZED BY THIS SECTION WILL
EXPIRE UPON THE SOONER OF:
(I) A DETERMINATION BY THE BROKER-DEALER OR INVESTMENT ADVISER THAT
THE DISBURSEMENT WILL NOT RESULT IN FINANCIAL EXPLOITATION OF THE ELIGI-
BLE ADULT; OR
(II) TEN BUSINESS DAYS AFTER THE DATE ON WHICH THE BROKER-DEALER OR
INVESTMENT ADVISER FIRST DELAYED DISBURSEMENT OF THE FUNDS, UNLESS
EITHER OF THE AGENCIES REQUESTS THAT THE BROKER-DEALER OR INVESTMENT
ADVISER EXTEND THE DELAY, IN WHICH CASE THE DELAY SHALL EXPIRE NO MORE
THAN TWENTY BUSINESS DAYS AFTER THE DATE ON WHICH THE BROKER-DEALER OR
INVESTMENT ADVISER FIRST DELAYED DISBURSEMENT OF THE FUNDS UNLESS SOONER
TERMINATED BY EITHER OF THE AGENCIES OR AN ORDER OF A COURT OF COMPETENT
JURISDICTION.
(C) A COURT OF COMPETENT JURISDICTION MAY ENTER AN ORDER EXTENDING THE
DELAY OF THE DISBURSEMENT OF FUNDS OR MAY ORDER OTHER PROTECTIVE RELIEF.
5. A BROKER-DEALER OR INVESTMENT ADVISER THAT, IN GOOD FAITH AND EXER-
CISING REASONABLE CARE, COMPLIES WITH SUBDIVISION FOUR OF THIS SECTION
SHALL BE IMMUNE FROM ANY ADMINISTRATIVE OR CIVIL LIABILITY THAT MIGHT
OTHERWISE ARISE FROM SUCH DELAY IN A DISBURSEMENT IN ACCORDANCE WITH
THIS SECTION.
6. A BROKER-DEALER OR INVESTMENT ADVISER MAY PROVIDE ACCESS TO OR
COPIES OF RECORDS THAT ARE RELEVANT TO THE SUSPECTED OR ATTEMPTED FINAN-
CIAL EXPLOITATION OF AN ELIGIBLE ADULT TO AGENCIES CHARGED WITH ADMINIS-
TERING STATE ADULT PROTECTIVE SERVICES LAWS AND TO LAW ENFORCEMENT,
EITHER AS PART OF A REFERRAL TO THE AGENCY OR TO LAW ENFORCEMENT, OR
UPON REQUEST OF THE AGENCY OR LAW ENFORCEMENT PURSUANT TO AN INVESTI-
GATION. THE RECORDS MAY INCLUDE HISTORICAL RECORDS AS WELL AS RECORDS
RELATING TO THE MOST RECENT TRANSACTION OR TRANSACTIONS THAT MAY
COMPRISE FINANCIAL EXPLOITATION OF AN ELIGIBLE ADULT OR THE FINANCIAL
IMPAIRMENT OF AN ADULT. ALL RECORDS MADE AVAILABLE TO AGENCIES UNDER
THIS SECTION SHALL NOT BE CONSIDERED A PUBLIC RECORD. NOTHING IN THIS
PROVISION SHALL LIMIT OR OTHERWISE IMPEDE THE AUTHORITY OF THE DEPART-
MENT OF FINANCIAL SERVICES TO ACCESS OR EXAMINE THE BOOKS AND RECORDS OF
BROKER-DEALERS AND INVESTMENT ADVISERS AS OTHERWISE PROVIDED BY LAW.
S 3. This act shall take effect on the one hundred eightieth day after
it shall have become a law; provided, however, that effective immediate-
ly, the addition, amendment and/or repeal of any rule or regulation
necessary for the implementation of this act on its effective date is
authorized and directed to be made and completed on or before such
effective date.