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Nelson Mullins COVID-19 Resources

Nelson Mullins is continuing to monitor developments related to COVID-19, including guidance from the Centers for Disease Control and various federal, state, and local government authorities. The firm is taking appropriate precautionary actions and has implemented plans to ensure the continuation of all firm services to clients from both in office and remote work arrangements across our 25 offices. 

In addition, click the link below to access extensive resources to address a wide variety of topics resulting from the virus, in general and by industry,  including topics such as essential businesses, force majeure, business interruption insurance, CARES Act and FFCRA, and others. 

Nelson Mullins COVID-19 Resources

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Four Bankruptcy Attorneys Recognized in Lawdragon 500 Guide

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Four Bankruptcy Attorneys Recognized in Lawdragon 500 Guide
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Securities Alert

July 6, 2020

Florida House Bill 813: Protection of Specified Adults

By Daniel Newman, Megan Kilissanly

On June 30, 2020, Florida Governor Ron DeSantis signed into law Florida House Bill 813 (“HB-813”). HB-813 amends section 415.1034 of the Florida Statutes, in part, to include dealers, investment advisers, and associated persons within the mandatory reporting provisions for abuse, neglect, or exploitation of vulnerable adults, as defined in chapter 415.

Furthermore, the new law provides for the creation of section 517.34, entitled “Protection of Specified Adults.” The new law provides broker dealers and investment advisers with a tool to protect specified adults from financial exploitation. Specified adults are defined as natural persons 65 years of age or older or vulnerable adults as defined in section 415.102 of the Florida Statutes.

In enacting this law, the Florida Legislature made clear that it recognizes the freedom of specified adults to manage their assets, make investment choices, and spend their funds, and absent reasonable relief of financial exploitation, such rights may not be infringed. The new law was designed to encourage securities dealers, investment advisers, and associated persons to take action to protect specified adults based upon a reasonable belief that a specified adult with an investment account has been, will be, or is the subject of financial exploitation.

The new law, which went into effect on July 1, 2020, has many components. First, the new law provides that a dealer or investment adviser may delay a disbursement or transaction of funds or securities from the account of a specified adult or an account for which a specified adult is the beneficiary, if the following apply:

  1. The dealer or investment adviser reasonably believes financial exploitation of the specified adult has occurred, is occurring, has been attempted, or will be attempted in connection with the disbursement or transaction;
  2. No later than 3 business days after the date on which the delay was placed, the dealer or investment adviser notifies in writing all parties authorized to transact business for the account and any trusted contact on the account, with the exception of any party the dealer or investment adviser reasonably believes has engaged in, is engaging in, has attempted to engage in, or will attempt to engage in suspected exploitation of the specified adult, of the hold placed on the transaction and the reason for the delay;
  3. No later than 3 business days after the date on which the delay was first placed, the dealer or investment adviser notifies the Florida Office of Financial Regulation of the delay electronically and on a form prescribed by rule; and
  4. The dealer or investment adviser immediately initiates an internal review of the facts and circumstances that caused the dealer or investment adviser to reasonably believe that financial exploitation of the specified adult has occurred, is occurring, has been attempted, or will be attempted.

Second, a delay on a disbursement or transaction under the statute expires 15 business days after the date on which the delay was first placed. However, the dealer or investment adviser may extend the delay for up to 10 additional business days if the dealer’s or investment adviser’s review of the available facts and circumstances continues to support such dealer’s or investment adviser’s reasonable belief of financial exploitation of the specified adult has occurred, is occurring, has been attempted, or will be attempted. A dealer or investment adviser that extends the delay must notify the Florida Office of Financial Regulation on a form prescribed by rule no later than 3 business days after the date on which the extension is applied.

Third, a dealer or investment adviser must make available to the Florida Office of Financial Regulation, upon request, all records relating to the delay placed by the dealer or investment adviser pursuant to section 517.34.

Fourth, before placing a delay on a disbursement or transaction, the dealer or investment adviser must have developed and put in place training, policies, or programs reasonably designed to educate associated persons on issues pertaining to financial exploitation. The dealer or investment adviser must also conduct training for all associated persons at least annually, maintain a written record and transcripts of all training conducted, and develop, maintain, and enforce procedures regarding the manner in which suspected financial exploitations are reviewed internally and, if applicable, the manner in which they are required to be reported to supervisory personnel.

A dealer or investment adviser who, in good faith and exercising reasonable care, complies with section 517.34 is immune from any administrative or civil liability that might otherwise arise from such a delay in a disbursement or transaction in accordance with the section. Absent reasonable belief of financial exploitation, the new law does not alter a dealer’s, investment adviser’s, or associated person’s obligation to comply with instructions from a client to buy or sell securities, disburse funds, or transfer securities from an account, close an account, or transfer an account to another dealer, investment adviser, or associated person.

The new law neither creates new rights nor imposes new obligations on a dealer, investment adviser, or associated person under applicable law. The new law also does not otherwise limit the right of a dealer, investment adviser, or associated person to refuse or place a delay on a disbursement or transaction under other applicable law or under an applicable customer agreement.

The above is only a summary of some of the changes to the Florida Statutes, and you should contact one of the authors or your primary Nelson Mullins contact for specific advice as you consider the effect of HB-813.