7/1/15 - Protecting dementia sufferers from scammers gains ground in U.S

U.S. states are now looking to provide more protection for elderly investors. Three states, most recently Missouri, have enacted laws that allow retail brokers to help curb scams against people with dementia.

The measures, under consideration in other states as well, give brokerages the authority to prevent older clients from transferring money to other people, at least temporarily, if a wealth manager believes his or her customer may have dementia and may be unknowingly being conned. But finalizing the rules can still be a long way off.  Once complete, it will take at least two years for all states to consider because of their legislative schedules, Egan said.

Missouri’s law, effective in August, requires brokerages not only to report suspected abuse to state agencies, but allows them to delay withdrawals and wire transfers for up to 10 business days. The broker may also alert family members. The Financial Industry Regulatory Authority, Wall Street’s industry-funded watchdog, is also developing guidance on the issue, with input from the SEC, said FINRA chairman and chief executive Richard Ketchum, at the 2015 Reuters Wealth Management Summit.

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