Investor Advocacy Clinic interns Christopher Pugh, Jason Robinson and Darius Wood recently filed a comment on FINRA Notice 15-37, a FINRA proposal to change several rules in an effort to protect seniors and vulnerable adults from financial exploitation.
The Clinic’s comment, available in full here, supported the proposed rule changes to the extent they aim to protect investors from financial exploitation. The Clinic suggested several changes to increase the proposal’s efficacy. First, the Clinic believes that if it is suspected that financial exploitation may occur, a firm should act and must not be given a safe harbor from liability unless it takes action to protect a customer. Second, we recommend that the obligation to act be expanded to include the front line representatives working with customers. Third, the proposal should require training created by FINRA and incorporated into its continuing education requirement for associated persons. Fourth, we believe that a trusted contact individual should not be named unless such a person agrees to undertake the role. Finally, we recommend that personal information disclosed to anyone other than a customer be limited.
The Investor Advocacy Clinic represents the voice of small consumer investors. In addition to providing legal representation of small investors who have claims against their brokers, the Investor Advocacy Clinic evaluates and comments on proposed rules that impact the small investor and engages in educational outreach for investors and professionals who work with investors.