SEC Proposes Identity Theft Rules
The Securities and Exchange Commission yesterday proposed a rule designed to protect investors from identity theft. Broker-dealers, mutual funds, and other SEC-regulated entities are being asked to implement identity theft safety programs that will establish and detect appropriate “red flags.”
Risk factors that a financial institution or creditor would be required to consider as a red flag for covered accounts include:
(1) the types of covered accounts it offers or maintains;
(2) the methods it provides to open its covered accounts;
(3) the methods it provides to access its covered accounts; and
(4) its previous experiences with identity theft.
Risk factors are likely to vary across account types. For example, margin accounts will differ from advisory accounts, and red flags for business accounts will be different than consumer accounts.
The SEC proposal was issued jointly with the Commodity Futures Trading Commission (CFTC) under Section 1088 of the Dodd-Frank Act. The proposed rules are substantially similar to rules adopted in 2007 by the FTC.
Click on the link for a full copy of the SEC/CFTC identity theft proposal.
Contact Fort Lauderdale securities attorney Howard N. Kahn, Esq., if you or someone you know has been the victim of identity theft in regard to an investment or brokerage account. Mr. Kahn is an experienced securities attorney and FINRA arbitrator. Contact him at 954-321-0176 or online.
