S2:E14 | Lessons From The Front Lines - Protecting Our Seniors and Vulnerable Investors | Compliance In Context

Welcome back to the Compliance In Context Podcast! Today’s episode features the fifth in a series of shows we refer to as the Lessons From The Front Lines series. These shows focus on real-life, tough-to-tackle subjects that other industry professionals and regulators have faced on the front lines of our industry. Today we have the pleasure of speaking with Enforcement and Investigations Chief Richard Szuch of the New Jersey Bureau of Securities to discuss one of the most critical issues affecting the investment management industry—namely—how firms can address issues and challenges with senior investors and investors with diminished capacity.

Interview

• The importance of investor protection
• What is the Bressler Map and what is its purpose?
• What is the mission of the NASAA Senior Diminished Capacity Committee? 
• How has the “NASAA Model Act to Protect Vulnerable Adults from Financial Exploitation” impacted the industry? 
• What expectations should firms have in order to properly supervise these activities?
• Enforcement trends in the area of senior investor exploitation
• How will investor protection continue developing in the future, both from an industry side and a legal/compliance side?

Quotes:

“I would say, from the very beginning I was keeping an eye on victims, their profiles, and how they could be exploited. We definitely had cases, when I was a prosecutor, that were ‘white collar type crimes.’ And obviously bad actors are looking to exploit people that are vulnerable, whether it’s their age or if they have some other vulnerability.” - Richard Szuch

“Every state had a law that applies to exploitation to older people but it’s usually about their personal safety, whether their home is secure, whether they’re physically okay. Some states have exploitation regarding finances in their laws. But then there’s been a new group of laws that have developed with the advent of NASAA’s Model Act.” - Richard Szuch

“40 or 50 percent of the investment advisory firms surveyed had not really changed their way of doing business in the past five years. So if I were to say that there was one thing that really needs to get out there, it’s education for the investors and for the firms, about the importance of this structure to be put around their business.” - Richard Szuch

“NASAA just put out (with the SCC and FINRA) a training module that, in essence, mimics what I used to do when I was in private practice, to train firms about what they needed to know.” - Richard Szuch

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