September 17, 2019 - Introduced by Senators Testin, Carpenter, Bernier,
Cowles, Olsen, Petrowski and Wirch, cosponsored by Representatives
Macco, Wittke, Bowen, Brandtjen, Dittrich, Edming, Gundrum,
Horlacher, James, Katsma, Knodl, Krug, Kulp, Magnafici, Mursau, Novak,
Petersen, Petryk, Plumer, Quinn, Ramthun, Rohrkaste, Schraa, Steffen,
Summerfield, Thiesfeldt, Tittl, Tranel and Skowronski. Referred to
Committee on Insurance, Financial Services, Government Oversight and
Courts.

This bill allows securities industry professionals to provide to the Department
of Financial Institutions, adult protective service agencies, and other persons notice
of suspected financial exploitation of certain vulnerable adults and allows
broker-dealers and investment advisers to temporarily delay transactions or
disbursements from the accounts of vulnerable adults when financial exploitation of
a vulnerable adult is suspected. The bill also increases penalties for securities
violations committed against these vulnerable adults.

Under current law, upon receiving a report of alleged abuse, financial
exploitation, neglect, or self-neglect of any person age 60 or older who has
experienced, is experiencing, or is at risk of experiencing abuse, neglect, self-neglect,
or financial exploitation (an elder adult at risk), the elder-adult-at-risk agency in
a county must respond by investigating or must refer the report to another agency
for investigation. Similarly, if the adult-at-risk agency in a county has reason to
believe that an adult who has a physical or mental condition that substantially
impairs his or her ability to care for his or her needs and who has experienced, is

experiencing, or is at risk of experiencing abuse, neglect, self-neglect, or financial
exploitation (an adult at risk) is the subject of abuse, financial exploitation, neglect,
or self-neglect, the adult-at-risk agency may respond by investigating to determine
whether the adult at risk is in need of protective services. “Financial exploitation”
includes obtaining an individual's money or property by deceiving or enticing the
individual or by coercing the individual to give, sell at less than fair value, or convey
money or property against his or her will without his or her informed consent, and
also includes certain crimes such as theft and forgery.

Current law also requires, with exceptions, certain securities industry
professionals to be registered with the Division of Securities in DFI, including an
individual who represents a broker-dealer in securities transactions (securities
agent) and an investment adviser representative.

This bill allows a securities agent, investment adviser representative, or other
individual serving in a supervisory, compliance, or legal capacity for a broker-dealer
or investment adviser (qualified individual) who reasonably suspects that financial
exploitation of an adult at risk or an individual who is 60 years of age or older
(together, vulnerable adult) has occurred or is being attempted to notify the division,
an adult-at-risk agency or elder-adult-at-risk agency (together, APS agency), a law
enforcement agency, or any combination of these, as well as certain other persons,
including a legal guardian, a person identified on a contact list provided by the
vulnerable adult, and a spouse, parent, adult child, or other individual reasonably
associated with the vulnerable adult. The bill also allows a broker-dealer or
investment adviser to delay a transaction on, or disbursement from, an account of
a vulnerable adult or an account on which a vulnerable adult is a beneficiary if all
of the following apply: 1) the broker-dealer, investment adviser, or qualified
individual reasonably suspects that the requested transaction or disbursement may
result in financial exploitation of a vulnerable adult; and 2) the broker-dealer or
investment adviser promptly notifies the division, an APS agency, or a law
enforcement agency and provides written notice of the delay and the reason for the
delay to all parties authorized to transact business on the account. The division may,
by rule, establish additional guidelines for the delay of a transaction or
disbursement. Any delay of a transaction or disbursement expires on the earlier of
the following: a determination by the broker-dealer or investment adviser that the
transaction or disbursement is not reasonably likely to result in financial
exploitation of the vulnerable adult; or, subject to exceptions, 15 business days after
the date on which the broker-dealer or investment adviser first delayed the
transaction or disbursement of the funds. The bill provides for immunity from
liability for a broker-dealer, investment adviser, or qualified individual that, in good
faith and exercising reasonable care, acts in accordance with these provisions.

Current law includes numerous provisions prohibiting specified conduct in
connection with securities transactions or the offering or sale of securities. Under
current law, a person who violates the state's securities laws may be subject to
criminal liability or civil liability or both. A person who willfully violates the state's
securities laws, with certain exceptions, is guilty of a Class H felony, punishable by
a maximum fine of $10,000 or a maximum term of imprisonment of six years or both.

A person may also be subject to a civil enforcement proceeding for violating the state's
securities laws. In a civil enforcement proceeding, the court in a circuit court
proceeding or the division in an administrative proceeding may impose a civil
penalty of not more than $5,000 for a single violation or not more than $250,000 for
more than one violation. Current law also includes a penalty enhancer for securities
law violations committed against a person who is at least 65 years of age. For
criminal offenses, the maximum fine may be increased by not more than $5,000 and
the maximum term of imprisonment may be increased by not more than five years,
and for civil offenses the civil penalty may be increased by not more than $5,000 for
a single violation or not more than $250,000 for more than one violation.