Secretary of State Increases Protection of Financially-Exploited Older, Vulnerable Persons

Assembly Bill 51 requires investment advisers and broker-dealers to report suspected cases of exploitation, increases penalties for violations of securities law

Post Date:06/15/2015

Contact: Catherine Lu, Public Information Officer 
             (702) 486-6982 / 334-7953 

(Carson City, NV; June 15, 2015) – In recognition of World Elder Abuse Awareness Day today, Secretary of State Barbara Cegavske announces changes being made to Nevada’s Uniform Securities Act following the passage of Assembly Bill 51. Effective July 1, 2015, Nevada-registered broker-dealers and investment advisers are required to report exploitation of older and vulnerable persons.

“Elder abuse comes in many forms – physical, financial, emotional, neglect or abandonment – and often several types of abuse will be inflicted at the same time,” said Cegavske. “Financial abuse is considered to be the most common form of abuse to elders, costing its victims an estimated $2.9 billion a year.”

Under AB 51, broker-dealers and investment advisers are required to attend training events to learn the warning signs of and proper steps for reporting exploitation of older and vulnerable persons. The Secretary of State’s office will host training events at the end of summer in northern and southern Nevada to assist with this requirement. AB 51 also enhances the penalties and damages for violations of the Uniform Securities Act when an older or vulnerable person is involved.

“Investment advisers and broker-dealers are often in a unique position to possibly identify potential exploitation of older or vulnerable persons,” said Cegavske. “They may be intimately aware of clients’ financial situations and may have long-standing relationships that give them the ability to identify sudden changes such as out-of-character investing or spending.”

According to statistics collected by the North American Securities Administrators Association (NASAA), of which the Nevada Secretary of State’s office is a member, 34 percent of enforcement actions taken by state securities regulators since 2008 have involved seniors in jurisdictions that track the age of its victims. Investment fraud is an area of particular concern, as victims can see their life savings depleted with little opportunity to recover financial stability.

Securities fraud can come in many forms. The investment might be fraudulent, or it could be a legitimate product that is sold without material information. Other investment problems include unregistered products, theft of funds or products sold by an unlicensed adviser or broker. Investors and caregivers are urged to “investigate before investing” by contacting the Secretary of State Securities Division to verify if the product and person selling it is registered/licensed and to find any public disclosures about the individual.

Nevada’s securities laws provide for responsible capital formation and the protection of investors. The State of Nevada licenses approximately 1,730 broker-dealers, 130,000 broker-dealer sales agents, 1,400 investment advisers, and 3,300 investment-adviser representatives.

Companies, investment advisers, and broker-dealers who have questions can contact the Securities Division by calling (702) 486-2440.

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