Final answer:
Brokerage firms can indeed place temporary holds on securities transactions for the accounts of senior investors, as per FINRA rules, to protect them against potential financial exploitation.
Step-by-step explanation:
The main answer to whether a brokerage firm may place a temporary hold on a securities transaction is Yes, under specific circumstances. Under Financial Industry Regulatory Authority (FINRA) rules, broker-dealers can place temporary holds on disbursements of funds or securities from the accounts of senior investors (persons aged 65 or older) and other individuals with mental or physical impairments that render them unable to protect their own interests. This is done to protect these individuals from potential financial exploitation.Firms are required to have reasonable belief that financial exploitation is taking place or has been attempted before placing such a hold. As a brokerage has an obligation to protect investors, they can intervene this way, especially in situations involving seniors or vulnerable adults. This temporary hold can be initiated by the broker-dealer upon suspecting exploitation and needs to immediately initiate an internal review of the facts and circumstances that caused the hold to be placed. Brokerage firms may also notify the trusted contact person and, if necessary, report the situation to the relevant regulatory body.
Therefore, the correct answer is B. Yes, for the account of a senior investor.