Banks Committee
AN ACT CONCERNING THE USE OF A CERTIFICATE, PROFESSIONAL DESIGNATION OR ADVERTISING IN ADVISING SENIOR CITIZENS
SUMMARY: This act prohibits anyone directly or indirectly involved in securities sales from falsely expressing or implying that they have special training, education, or experience in providing financial advice or services to seniors. The act exempts from this prohibition a person who meets certain education requirements and allows the banking commissioner to adopt implementing regulations. A person who willfully violates this prohibition is subject to a fine of up to $2,000, two years imprisonment, or both.
The act also requires the insurance commissioner to adopt regulations pertaining to the sale of life insurance or annuities to seniors and requires him to take certain enforcement actions against anyone who violates these regulations.
EFFECTIVE DATE: July 1, 2009
EDUCATION REQUIREMENTS
Under the act, a person cannot sell, purchase, or offer securities using a senior-specific certificate, title, or professional designation unless it was obtained by completing (1) an academic degree in a related field from an accredited higher education institution or (2) a course of study in a related field provided by an organization accredited by:
1. the American National Standards Institute,
2. the National Commission for Certifying Agencies,
3. an organization recognized as an accrediting agency by the U. S. Department of Education pursuant to the 1965 Higher Education Act, or
4. any other organization approved by the banking commissioner.
The act prohibits a person who meets these requirements from using the certificate, title, or professional designation in a false or deceptive manner. It also requires the banking commissioner to determine whether a person's academic degree is in a related field.
INSURANCE REGULATIONS
The act requires the insurance commissioner to adopt regulations to (1) prevent misleading or fraudulent marketing practices regarding life insurance and annuities sold to seniors and (2) set standards for the use of senior-specific certification and professional designations used in life insurance and annuities sales.
Under the act, a person who violates these regulations is subject to license suspension or revocation, a fine of up to $5,000, or both.
BACKGROUND
Securities Sales and Unethical Practices
The law prohibits anyone from directly or indirectly engaging in any dishonest or unethical practice in connection with a security offer, sale, or purchase. It prohibits anyone from (1) employing any device, scheme, or artifice to defraud; (2) making any untrue statement of a material fact or omitting a material fact needed to make the statements not misleading; or (3) engaging in any act, practice, or course of business that operates or would operate as a fraud or deceit upon anyone.
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