August 12, 2022

Volume XII, Number 224

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August 12, 2022

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Nearly 700 Reports Financial Abuse of Elders/Dependent Adults Received By DFPI

In 2019, I wrote about a then pending proposal, SB 496 (Moorlach), to add broker-dealers and investment advisers to the category of mandated reporters of known or suspected financial abuse of elders or dependent adults.   This legislation was later enacted, 2019 Cal. Stats. ch. 272, and took effect on January 1, 2020.   As a result, the broker-dealers and investment advisers became subject to reporting requirements similar to those already imposed on banks and credit unions (the requirements differ in respect to which agency or agencies a report must be submitted.  The Department of Financial Protection & Innovation reports that in the first 18 months since the law took effect, it has received and reviewed 699 reports pursuant to this legislation.

At the time, I questioned whether imposing this reporting requirement might run afoul of Section 15(i)(1) of the Securities Exchange Act of 1934 (“Exchange Act”) which states:

No law, rule, regulation, or order, or other administrative action of any State or political subdivision thereof shall establish capital, custody, margin, financial responsibility, making and keeping records, bonding, or financial or operational reporting requirements for brokers, dealers, municipal securities dealers, government securities brokers, or government securities dealers that differ from, or are in addition to, the requirements in those areas established under this title [the Exchange Act].

To date, there are no reported decisions answering that question.

© 2010-2022 Allen Matkins Leck Gamble Mallory & Natsis LLP National Law Review, Volume XII, Number 45
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About this Author

Keith Paul Bishop, Corporate Transactions Lawyer, finance securities attorney, Allen Matkins Law Firm
Partner

Keith Bishop works with privately held and publicly traded companies on federal and state corporate and securities transactions, compliance, and governance matters. He is highly-regarded for his in-depth knowledge of the distinctive corporate and regulatory requirements faced by corporations in the state of California.

While many law firms have a great deal of expertise in federal or Delaware corporate law, Keith’s specific focus on California corporate and securities law is uncommon. A former California state regulator of securities and financial institutions, Keith has decades of...

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