THE SENATE

S.B. NO.

2873

THIRTIETH LEGISLATURE, 2020

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO SECURITIES.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 

     SECTION 1.  Chapter 485A, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"PART  PROTECTION OF VULNERABLE ADULTS FROM FINANCIAL EXPLOITATION

     §485A-A  Definitions.  As used in this part, unless the context otherwise requires:

     "Financial exploitation" means:

     (1)  The wrongful or unauthorized taking, withholding, appropriation, or use of money, assets, or property of a vulnerable adult; or

     (2)  Any act or omission taken by a person, including through the use of a power of attorney, guardianship, or conservatorship of a vulnerable adult, to:

          (A)  Obtain control through deception, intimidation, or undue influence over the vulnerable adult's money, assets, or property to deprive the vulnerable adult of the ownership, use, benefit, or possession of his or her money, assets, or property; or

          (B)  Convert money, assets, or property of the vulnerable adult to deprive the vulnerable adult of the ownership, use, benefit, or possession of his or her money, assets, or property.

     "Qualified person" means any agent, broker-dealer, investment adviser representative, investment adviser, or person who serves in a supervisory or compliance capacity for a broker-dealer or an investment adviser.

     "Reasonably associated individual" means any person known to the qualified person to be reasonably associated with the account.

     "Vulnerable adult" means:

     (1)  A person sixty-two years of age or older; or

     (2)  A person eighteen years of age or older who, because of mental, developmental, or physical impairment, is unable to:

          (A)  Communicate or make responsible decisions to manage the person's own care or resources;

          (B)  Carry out or arrange for essential activities of daily living; or

          (C)  Protect oneself from abuse, as defined in section 346-222.

     §485A-B  Governmental disclosures.  If a qualified person reasonably believes that financial exploitation of a vulnerable adult may have occurred, may have been attempted, or is being attempted, the qualified person shall promptly notify the commissioner.

     §485A-C  Immunity for governmental disclosures.  A qualified person who, in good faith and exercising reasonable care, makes a disclosure of information pursuant to section 485A-B shall be immune from administrative or civil liability that might otherwise arise from the disclosure or for any failure to notify the customer of the disclosure.

     §485A-D  Third-party disclosures.  If a qualified person reasonably believes that financial exploitation of a vulnerable adult may have occurred, may have been attempted, or is being attempted, a qualified person may notify a reasonably associated individual or any third party previously designated by the vulnerable adult.  Disclosure may not be made to any reasonably associated individual or previously designated third party that is suspected of financial exploitation or other abuse of the vulnerable adult.

     §485A-E  Immunity for third-party disclosures.  A qualified person who, in good faith and exercising reasonable care, complies with section 485A-D shall be immune from any administrative or civil liability that might otherwise arise from the disclosure.

     §485A-F  Delaying disbursements.  (a)  A broker-dealer or investment adviser may delay a disbursement from an account of a vulnerable adult or an account on which a vulnerable adult is a beneficiary if:

     (1)  The qualified person reasonably believes, after initiating an internal review of the requested disbursement and the suspected financial exploitation, that the requested disbursement may result in financial exploitation of a vulnerable adult; and

     (2)  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 vulnerable adult;

          (B)  Immediately, but in no event more than two business days after the requested disbursement, notifies the commissioner; and

          (C)  Continues its internal review of the suspected or attempted financial exploitation of the vulnerable adult, as necessary, and reports the investigation's results to the commissioner within seven business days after the requested disbursement.

     (b)  Any delay of a disbursement as authorized by this section shall expire upon the sooner of:

     (1)  A determination by the broker-dealer or investment adviser that the disbursement will not result in financial exploitation of the vulnerable adult; or

     (2)  Fifteen business days after the date on which the broker-dealer or investment adviser first delayed disbursement of the funds, unless the commissioner requests that the broker-dealer or investment adviser extend the delay, in which case the delay shall expire no more than twenty-five business days after the date on which the broker-dealer or investment adviser first delayed disbursement of the funds, unless sooner terminated by the commissioner or by 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 based on the petition of the commissioner, the broker-dealer or investment adviser that initiated the delay under this section, or other interested party.

     §485A-G  Immunity for delaying disbursements.  A broker-dealer or investment adviser that, in good faith and exercising reasonable care, complies with section 485A-F shall be immune from any administrative or civil liability that might otherwise arise from a delay in disbursement in accordance with this section.

     §485A-H  Records.  A broker-dealer or investment adviser shall provide access to or copies of records that are relevant to the suspected or attempted financial exploitation of a vulnerable adult to the commissioner, agencies charged with administering state adult protective services laws, or law enforcement, either as part of a referral to the commissioner, agency, or law enforcement, or upon request of the commissioner, agency, or law enforcement pursuant to an investigation.  The records may include historical records as well as records relating to the most recent transaction or transactions that may comprise financial exploitation of a vulnerable adult.  All records made available under this section shall not be considered a government record as defined in section 92F-13.

     Nothing in this provision shall limit or otherwise impede the authority of the commissioner to access or examine the books and records of broker-dealers and investment advisers as otherwise provided by law.

     §485A-I  Multiple duties to report.  Compliance with this section shall not discharge the duty to report suspected abuse under any other section."

     SECTION 2.  In codifying the new sections added to chapter 485A, Hawaii Revised Statutes, by section 1 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating and referring to the new sections in this Act.

     SECTION 3.  This Act shall take effect upon its approval.

 

INTRODUCED BY:

_____________________________

 

 

BY REQUEST

 

 

Report Title:

Uniform Securities Act; Vulnerable Adult; Financial Exploitation; Chapter 485A

 

Description:

Protects vulnerable adults from financial exploitation in relation to securities.

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.