Legal Ethics and an Aging Population: Securities Practitioners' Roles in Preventing Financial Exploitation of the Elderly

Abstract

This article, included in the Practicing Law Institute Securities Arbitration 2017 coursebook, examines the role attorneys can play in preventing the financial exploitation of the elderly. Financial abuse of the elderly is growing by virtue of the fact that the U.S. population is aging. Aging related challenges, whether cognitive or physical, will affect millions of elderly individuals, making them vulnerable to fraud and abuse. Preventing elder financial abuse requires a multi-faceted approach that draws upon the training, resources and access of professionals, service providers, federal and state regulators and adult protective services. This article examines the roles of two critical participants in the context of their respective ethical obligations and industry rules governing their conduct: the attorneys representing the elderly investors and the financial firms servicing their accounts. Part I of the article discusses the problems seniors face and the coming "senior tsunami;" part II discusses relevant Model Rules of Professional Conduct governing attorneys and how adherence to those rules can help prevent elderly financial abuse. Finally, part III examines the applicable rules and standards governing the brokerage industry and financial professionals' role in preventing or reporting financial exploitation of the elderly.

Keywords: Financial abuse, exploitation, seniors, elderly, diminished capacity, dementia, Model Rules of Professional Conduct, attorney ethical obligations, broker-dealer, financial advisors, FINRA.