BillCam

HOUSE BILL No. 4589

May 4, 2017, Introduced by Reps. Graves, Brinks, Love, Lucido, Geiss, Sabo, Gay-Dagnogo, Faris, Camilleri, Phelps, Green, Chang, Chirkun, Hertel, Yanez, Schor, Pagel, Brann, Rendon, Hoadley, Ellison, Moss, Hammoud and Lasinski and referred to the Committee on Financial Services.

A bill to amend 2008 PA 551, entitled

"Uniform securities act (2002),"

(MCL 451.2101 to 451.2703) by amending the title and by adding

article 5A.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

TITLE

An act to enact the uniform securities act (2002) relating to

the issuance, offer, sale, or purchase of securities; to prohibit

fraudulent practices in relation to securities; to establish civil

and criminal sanctions for violations of the act and civil

sanctions for violation of the rules promulgated pursuant to the

act; to require the registration of broker-dealers, agents,

investment advisers, and securities; to regulate Michigan

investment markets; to make uniform the law with reference to

securities; to authorize certain actions to protect financially

endangered adults from financial exploitation in relation to

securities and provide protection from civil liability for those

actions; to prescribe the powers and duties of certain state

governmental officers and agencies; and to repeal acts and parts of

acts.

ARTICLE 5A

FINANCIAL EXPLOITATION OF FINANCIALLY ENDANGERED ADULTS

Sec. 531. As used in this article:

(a) "Financial exploitation" means 1 or more of the following:

(i) A wrongful or unauthorized taking, withholding, or use of

money, assets, or property of a financially endangered adult.

(ii) An act or omission by a person, including through the use

of a power of attorney, guardianship, or conservatorship of a

financially endangered adult, to do any of the following:

(A) Obtain control, through deception, intimidation, or undue

influence, over the financially endangered adult's money, assets,

or property to deprive the financially endangered adult of the

ownership, use, benefit, or possession of his or her money, assets,

or property.

(B) Convert money, assets, or property of a financially

endangered adult to deprive him or her of the ownership, use,

benefit, or possession of his or her money, assets, or property.

(b) "Financially endangered adult" means any of the following:

(i) An individual who is 65 years of age or older.

(ii) An adult in need of protective services, as defined in

section 11 of the social welfare act, 1939 PA 280, MCL 400.11.

or sibling.

(d) "Qualified individual" means an agent, investment adviser

representative, or other individual who serves in a supervisory,

compliance, or legal capacity for a broker-dealer or investment

adviser.

Sec. 533. (1) If a qualified individual reasonably believes

that financial exploitation of a financially endangered adult may

have occurred, may have been attempted, or is being attempted, the

qualified individual shall promptly notify the administrator and

the department of health and human services.

(2) A qualified individual who in good faith and exercising

reasonable care makes a disclosure of information under this

section is immune from administrative or civil liability that might

otherwise arise from the disclosure or for any failure to notify

the customer of the disclosure.

(3) If a qualified individual who in good faith and exercising

reasonable care does not disclose information about a financially

endangered adult to the administrator or department of health and

human services under this section, or to any of the persons

described in section 535, because he or she has a genuinely held

belief that financial exploitation of the financially endangered

adult has not occurred, he or she is immune from administrative or

civil liability that might otherwise arise if another person

reports that financial exploitation of the financially endangered

adult may have occurred, may have been attempted, or is being

attempted.

Sec. 535. (1) If a qualified individual reasonably believes

that financial exploitation of a financially endangered adult may

have occurred, may have been attempted, or is being attempted, the

qualified individual may notify any of the following persons

concerning the qualified individual's belief unless the qualified

individual reasonably suspects that the person has engaged in

financial exploitation or other abuse of the financially endangered

adult:

(a) An immediate family member of the financially endangered

adult.

(b) A legal guardian of the financially endangered adult.

(d) A trustee, cotrustee, or successor trustee of the account

of the financially endangered adult.

(e) An agent under a power of attorney of the financially

endangered adult.

(f) Any individual previously designated by the financially

endangered adult in a customer agreement.

(g) Any other person permitted under existing law.

(2) A qualified individual who, in good faith and exercising

reasonable care, complies with subsection (1) is immune from any

administrative or civil liability that might otherwise arise from

the disclosure.

Sec. 537. (1) A broker-dealer or investment adviser may delay

a disbursement from an account of a financially endangered adult or

an account on which a financially endangered adult is a beneficiary

if all of the following are met:

(a) The broker-dealer, investment adviser, or qualified

individual 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 financially endangered adult.

(b) The broker-dealer or investment adviser does all of the

following:

(i) Immediately, but in no event more than 2 business days

after the requested disbursement, provides written notification of

the delay and the reason for the delay to each individual who is

authorized to transact business on the account, except any of those

individuals who are reasonably believed to have engaged in

suspected or attempted financial exploitation of the financially

endangered adult.

(ii) Immediately, but in no event more than 2 business days

after the requested disbursement, notifies the administrator and

the department of health and human services.

(iii) Continues its internal review of the suspected or

attempted financial exploitation of the financially endangered

adult, as necessary, and reports the investigation's results to the

administrator and the department of health and human services

within 7 business days after the requested disbursement.

(2) A delay of a disbursement that is authorized under

subsection (1) expires when the earlier of the following is met:

(a) The date the broker-dealer or investment adviser makes a

determination that the disbursement will not result in financial

exploitation of the financially endangered adult.

(b) A period of 15 business days after the date on which the

broker-dealer or investment adviser first delayed disbursement of

the funds has expired, unless either the administrator or the

department of health and human services requests that the broker-

dealer or investment adviser extend that period. If the

administrator or department of health and human services requests

an extension under this subdivision, the delay expires 25 business

days after the date on which the broker-dealer or investment

adviser first delayed disbursement of the funds, unless the

administrator, the department of health and human services, or a

court of competent jurisdiction by order establishes an earlier

expiration date.

(3) A court of competent jurisdiction may enter an order

extending the delay of the disbursement of funds under this section

or may order other protective relief based on the petition of the

administrator, the department of health and human services, the

broker-dealer or investment adviser that initiated the delay under

this section, or another interested party.

(4) A broker-dealer or investment adviser that, in good faith

and exercising reasonable care, complies with this section is

immune from any administrative or civil liability that might

otherwise arise from a delay in a disbursement that is authorized

under this section.

Enacting section 1. This amendatory act takes effect 90 days

after the date it is enacted into law.

Enacting section 2. This amendatory act does not take effect

unless Senate Bill No.____ or House Bill No. 4588 (request no.

02338'17) of the 99th Legislature is enacted into law.