Developments in Securities Regulation, Corporate Governance, Capital Markets, M&A and Other Topics of Interest. MORE

The Dodd-Frank Act contains provisions designed to help protect seniors (62 and over) from being victimized by persons who market securities, insurance products, or financial instruments to seniors and who claim to be specially certified to assist seniors in financial matters.

 The Act requires the newly authorized Office of Financial Literacy to institute a system for providing grants of up to $500,000 per year for 3 years to states, state securities commissions, insurance regulators and consumer protection agencies to:

  • Hire staff to investigate and prosecute cases involving misleading or fraudulent marketing to seniors.
  • Fund technology, equipment and training for prosecutors and law enforcement to identify salespersons and advisers who target seniors with misleading designations.
  • Fund technology, equipment and training to improve prosecution of such persons.
  • Provide educational materials and training to seniors to increase awareness and understanding of misleading or fraudulent marketing.
  • Develop comprehensive plans to combat misleading or fraudulent marketing to seniors.

 To qualify, the state agency must meet the model rules of the North American Securities Administrators Association or the National Association of Insurance Commissioners, as applicable, on the use of senior-specific certifications and professional designations.

 “Misleading or fraudulent marketing” is defined as the use of a misleading designation by a person that sells to or advises seniors in connection with the sale of a financial product.

 State agencies should start preparing to file grant applications.