® notes® notes ®

® Winter 2019: Volume 17, Issue 3

The unclaimed property industry’s premier compliance journal, published exclusively by Keane since 2003.

KEEPING UP WITH UNCLAIMED PROPERTY

IN THIS ISSUE: To Self-Assess or be Assessed Interest – This is Now the Question 2-3 Virtual Currency Update 16-17

Industry Table Talk: Transfer Agents Discuss Unclaimed Property 3-7 VDAs - Not Just for Delaware 18

Where Liability Lies 8 RUUPA Round Up 19

Keane Unclaimed Property System (KUPS) Update 9 Holders Eagerly Await News from the IRS and Treasury 20-21

Audit Update: Texas 10-11 Litigation Update 22-23

Buried Treasure 12-13 Legislative Update 24-27

Texas House Bill 3598 14-15 Keane Expert Spotlight: Debbie Zumoff 28

Unclaimed Property. Uncompromising Performance. To Self-Assess or be Assessed Interest – This is Now the Question By Heather Gabell, J.D., Director of Compliance

The New York trial court’s recent denial of JP Morgan Chase court requested guidance from the Office of the Comptroller & Co.’s motion for summary judgment in New York ex. (OSC) who stated that the statutory language is discretionary rel. Raw Data Analytics LLC v. JPMorgan Chase & Co.1 has because of the waiver language. However, the Office of the caused a stir among holders in all states. JPMorgan Chase Attorney General (OAG) later submitted a letter disagreeing & Co. (“JPMC”) has appealed the decision, and the holder with the OSC’s position. On August 30, 2019, the Court community is keeping a close eye on the outcome. found that the language of the statute “was abundantly The qui tam action was filed in 2015 for the alleged failure clear” and the “shall pay interest” language is not a to self-assess interest on late reported property – a failure the contingent obligation - the duty to pay interest arises as soon relator alleged resulted in fraudulent reports under the New as the holder files late property. York False Claims Act. This outcome was surprising to holders, given that New Relevantly, per Section 1412 of New York’s Abandoned York routinely does not issue interest and penalties and Property Law (APL): that it is not industry practice to self-assess interest. If the ruling is upheld, what remains to be seen is whether or Any person failing to pay any sum or to deliver any not other states with similar “shall pay interest” language property required to be paid or delivered to the in their statutes, who have not historically pursued holders state comptroller or any law relating to abandoned for interest and penalties, will look to the ruling and begin property shall pay interest on the amount or value enforcing their statutes; or will find themselves forced into a of such property. Such interest shall be at the rate of position by qui tam actions brought against holders. 10% per annum computed for a period to commence upon the date such payment or delivery was required A survey of states with False Claims Acts reveals that holders by this chapter and to terminate upon the date of full could potentially be at risk in those states if they also have compliance therewith, except that the state comptroller similar “shall pay interest” language in their unclaimed may waive the payment of all or part of such interest property laws. Other courts could construe the language as whenever in his opinion the circumstances warrant such New York did, and find an affirmative obligation to report waiver. and remit interest prior to any notice or assessment by the state. It is important to note, that even the states that JPMorgan Chase & Co. (JPMC) took the position that the routinely assess interest and penalties (such as California assessment of interest on late property on a report is in the and Texas), do not require holders to self-asses interest, state’s discretion and therefore a contingent obligation. The

2 thus there remains false claims act risk in those states for the state waive any interest due, may help protect holders. the same reason, although a materiality argument could In response to the risks revealed by this case, Keane is foreclose significant damages if the state routinely assesses updating our Penalties and Interest Risk Profile to include interest of its own volition. information on jurisdictions with a False Claims Act and/or The decision has also led to the uncomfortable realization “shall pay interest” language. Once finalized we will update that relying on state guidance – or even industry wide the Keane Unclaimed Property System (KUPS) Penalties and practice - may not be prudent. JPMC cited examples of the Interest report to implement these changes. This information state’s permissive language from New York’s own reporting will help companies understand their exposure and consider manual, which contains language that the state “can remediation programs to reduce their liability in jurisdictions charge” interest. This decision may also have a chilling effect beyond just those presently assessing penalties and interest. on compliance with the unclaimed property law in New York We foresee other states following suit if New York‘s OSC is – holders may become hesitant to voluntarily come forward forced by the courts to require prospective self-assessment with past due property if they are required to self-assess and of interest, much like in 2010 when California started issuing remit interest at the time of the report. penalties and slowly other states followed suit. Can holders protect themselves against potential False We encourage holders to stay proactive and to pursue Claims Act accusations? Maybe. We recommend that voluntary disclosure agreements, or other ways to reduce holders consult with their counsel to determine the level of exposure in these states, and Keane is here to help holders exposure in these states. Perhaps the inclusion of language through the process. on unclaimed property reports stating that interest will not 1 New York ex. rel. Raw Data Analytics LLC v. JPMorgan Chase & Co., N.Y. Sup. Ct., No. be assessed at the present time, along with a request that 100271/2015, 8/30/19.

Industry Table Talk: Transfer Agents Discuss Unclaimed Property By John Buonomo, Executive Director AST Rob Franz, Senior Director - Compliance, Broadridge John Ulla, Chief Operating Officer, Continental Stock Transfer & Trust Transfer agents act as a liaison and record keeper between then their account may become dormant and eventually a company and their investors. Transfer agents maintain remits to the state. investor’s account records, issue and cancel certificates, Some of the largest transfer agents work with Keane and process investor mailings, ensure investors receive their due were gracious enough speak with us regarding the transfer interest and handle other shareholder/investor concerns. agent industry and its intersection with unclaimed property; Many companies use record keeper transfer agents, but AST’s Senior Vice President, John Buonomo, Broadridge some companies act as their own.. Unclaimed property poses Financial Solutions, Inc.’s Senior Director, Robert Franz and a unique challenge for transfer agents as many investors and Continental Stock Transfer & Trust’s Chief Operating Officer, shareholders do not understand that if they do not vote their John Ulla. proxy, cash their dividend checks or log into their account

3 Introduction to the Industry diligence initiatives in order to garner as many responses as For readers who may be unfamiliar with the transfer possible ahead of state deadlines. agent arena (or the securities industry in general), JB: In order to mitigate risk, you need to drive contact please give a brief overview of how unclaimed with holders. Messages on statements or proxy material property impacts your niche on a day-to-day basis. that outline the importance of maintaining contact are the John Buonomo: Unclaimed property has an effect on all easiest and most effective way. Additionally, good outreach facets of the transfer agency industry. The importance of programs to folks who’s accounts are about to become establishing contact with the transfer agent has grown; dormant or who maintain uncashed checks on the file will therefore, it is important to vote your proxy, cash your greatly mitigate risk. dividend checks, and log on to your account to check your What are the unclaimed property risk factors that balance. Failure to maintain contact results in your property transfer agents should consider in order to achieve being remitted to the states. or maintain compliance with statutes, rules, and Rob Franz: Shareholder contact details within records regulations? are subject to change on a daily basis. Without consistent RF: Transfer agents should monitor state unclaimed property reminders to update account details to ensure there is regulations or partner with a firm/organization that does no interruption in communication about their holdings, so. Upon confirmation of changes, unclaimed property shareholders may forget about certain securities resulting in procedures should be amended accordingly. So, it’s almost a property being deemed dormant and potentially eligible for constant state of diligence. delivery to the state as unclaimed property. JU: Every state has their own nuances to the rules. Every John Ulla: In addition, unclaimed property adds a significant state is constantly changing. And every state institutes burden and expense to transfer agents’ overall process. additional rules that are not even in their regulations, which Obviously, trying to accommodate the needs of the various makes it increasingly difficult to manage the function. states and jurisdictions is a difficult task, as well as staying JB: More states are enacting regulations that allow them updated on the rules and regulations. So, that in itself has a to levy penalty and interest assessments. Some of these major impact on a day-to-day basis to transfer agents. assessments are based on interpretation of the regulations From a high level perspective, how do transfer agents already on the books. This is a major risk factor from a typically mitigate their unclaimed property risk? financial and reputational perspective. JU: Most transfer agents in this day and age have processes JU: Additionally, we have the extra burden, now, of these and procedures in place, to mitigate risk for unclaimed additional privacy rules that are coming into play with property. The reputation and financial risks are just too the states, such as the new California rule and the GDPR. great for transfer agents not to have strict processes in These cause trepidation for transfer agents, especially those place. There are various regulatory requirements that that partner with outside entities due to the risk factors transfer agents need to follow, such as 17Ad-17 mailings associated with these new rules and putting our shareholder for unresponsive shareholders, as well as the unresponsive information out there with other organizations. payee mailings for checks. We work with Keane because, quite frankly, with the maintenance and the technical understanding of the rules, regulations and the changing environment, it makes more sense for us to work with somebody who specializes in that rather than try and maintain that process in-house. RF: In compliance with 17Ad-17, transfer agents execute searches for shareholder accounts deemed lost and solicit confirmation to update individual account records, thereby establishing current contact and reducing the amount of eligible accounts to be considered for escheatment. Transfer agents may also include property not yet eligible but which may be considered eligible during the next cycle in due

4 5 How are issuers informed of their shareholders’ current location services, where our clients are willing to engage account status or uncashed checks? How are they in such. We’ve also added a process for shareholders who prompted to ensure the account stays active? Who access their account online; if their account is in a lost status, takes the action? they are required to acknowledge that their address on JU: SEC 17Ad-17 rules were amended in the late 2000s to record is correct or provide an updated address. Either of include unresponsive payee mailings. So, transfer agents are these actions will remove the trigger. required to do semi-annual mailings for checks older than RF: We have something similar with our shareholder portal. 6 months. Complying with the regulatory rules goes a long Our shareholder call center also has alerts to let them know way towards ensuring that the accounts stay active. if an account requires authentication or updates. RF: Upon the completion of the unclaimed property analysis process each cycle, issuers are provided with a listing of Transfer Agents & Unclaimed Property accounts and corresponding property details (shares and Based on your own experience, how complex is cash) for all eligible property. This can be used by issuers to managing unclaimed property across a significant perform their own supplemental outreach. Issuers have the number of clients? What have you found to reduce the ability to make the necessary updates to accounts following volume of escheatable accounts? contact with the shareholder via the transfer agent’s JB: The complexity does not come from the significant Issuer Portal. And then, of course, the issuer can make number of clients, it comes from the inconsistency in state the necessary updates for those accounts if it’s relevant or requirements. Again, having a good outreach program correct. greatly reduces the volume of escheatable accounts. We JB: With AST, issuers are informed via an online reporting have also found that the SEC adding unresponsive payees to tool that enables them to drill down into the details of the the requirements of 17Ad-17 have reduced our volume. That open checks on their file. This will enable them to work with makes sense as anything that drives contact will reduce the us as the transfer agent and their shareholders to perform escheat liability. targeted mailings and outreach programs that unite the RF: By establishing programs that make it easy to have shareholder with the amount owed to them and also prevent shareholders sign up for direct deposit (in order to have forwarding to the states. dividend payments immediately distributed to accounts), the JU: The transfer agent, proxy company (like Broadridge) or number of uncashed checks eligible for escheatment can be the issuer can take action to inform shareholders. reduced. Resources spent educating shareholders about the possibility of escheatment can offset costs in the long run. What other strategies can transfer agents use to For example, considering enclosure reminders re: unclaimed offset the potential costs and/or other negative property to all shareholders, not just eligible accounts, can consequences of noncompliance impacting their result in more frequent contact with owners. unclaimed property exposure and liability? Are your clients concerned with the importance JB: Notification, notification, notification. Transfer agents of retaining shareholder accounts? What efforts have plenty of “white space” on statements, proxies, checks, does your company take to keep clients informed etc. to provide a notice if a shareholder has not contacted of state requirements and best practices to prevent them in over a year, or if the shareholder has uncashed escheatment of customer accounts? checks. RF: This is a matter of issuer preference. Some issuers will RF: Establishing a procedural and systemic means for swift take a more proactive approach on unclaimed property updating and retrieving of contact details is important to matters than others. It is important for transfer agents and make sure everything is processed consistently. clients to discuss approaches for unclaimed property. JU: On a quarterly basis, we send our files to the National JU: Yeah, I agree with Rob 100%. Continental sends a Change of Address Database (NCOA). And any differences quarterly newsletter out to our issuers with generally one or in our records to the NCOA records result in an additional two articles pertaining to industry updates on abandoned mailing to both the old and the new address. So, we go the property. extra mile to get better addresses for these shareholders. In addition we partner with Keane to do pre-escheatment JB: Clients are concerned with the effect escheatment has on their shareholder bases as it creates a shareholder

4 5 relations nightmare with the complaints logged (even if, removals are translated from issuer to transfer agent to as in almost all cases, the account was escheated properly vender, and can be misinterpreted or not completed in a and according to law). AST has regular client webinars and timely manner. newsletters that provide updates on industry happenings, JU: I guess the advantages and disadvantages are based penalties, audits and regulatory changes. on the type and size of the organization. An advantage of RF: Broadridge offers client forums and educational outsourcing is that you don’t have the cost of maintaining webinars to ensure our clients are aware of our commitment the process in-house and all that it entails. So, I think, to complying with all state laws and understand how their depending on the size of the organization as well as the individual shareholder base can be impacted by unclaimed resources available, outsourcing to an expert in the field far property regulations. outweighs the benefit of trying to keep it in-house. From a high-level perspective as a transfer agent, do JB: The most distinct advantage to outsourcing is keeping you view the range of escheat issues as a revenue up with the ever changing regulations, and ensuring systems creating product line, or a potential matter of liability are updated accordingly. and compliance risk that you are obligated to handle? As a transfer agent, how do you address the company’s JU: We don’t view this as a revenue creating product line at compliance with newly-enacted RUUPA requirements all. We’re happy to break even in performing the function. in certain states, such as tracking the confirmation It’s more a matter of liability and compliance risk. of death on an account or the use of electronic RF: I agree, escheatment issues are a liability and compliance communications for outreach efforts? risk that Broadridge works to resolve, with the issuer as a JU: Most transfer agent systems are able to track data such partner to handle reporting, remittance, audit inquiries, state as confirmation of death and communications. The bigger penalties, and requests for documentation. problem is going out and looking for the information that Are you aware of any industry initiatives that attempt isn’t in the system. to counterbalance the states’ increasingly aggressive JB: We do run the database against the Death Master Index enforcement of unclaimed property laws? to obtain a date of death and rely on our unclaimed property JB: The industry supported RUUPA (the Revised Uniform provider to perform the filings in accordance with the laws. Unclaimed Property Act) which would have brought some JU: I think the bigger issue with all of these RUUPA uniformity to the numerous regulations amongst the states. requirements is trying to know what to do as well as fend off However, states are choosing what sections of RUUPA that a lot of these third party audit firms who are coming in with they are enacting to law, and adding other regulations. their own processes or their own interpretations of these JU: As an industry, the Stock Transfer Association represents regulations. transfer agents and they do work with experts in the industry How does your company handle reporting securities to lobby the states and to try and get the states to adhere to with little to no value? What issues arise from these standardized rules or take a different view on some of the efforts? regulations that they attempt to impose. JB: We rely on our service provider to handle this. Unclaimed Property Best Practices for RF: Broadridge considers all accounts eligible for Transfer Agents escheatment, regardless of the value of the account. No What are the advantages and disadvantages of account will be omitted from reporting based on account outsourcing unclaimed property efforts versus keeping value, including accounts with restricted shares. them in-house for a transfer agent? JU: Continental agrees with the position of escheating RF: The advantages are fewer handoffs in a complex all property except for restricted securities as our process. For example, shareholder files aren’t sent to a third interpretation of the rules is that they’re not issued stock party for analysis, and processing and contact updates can until the restriction is lifted. Unfortunately, most states be applied to previously eligible accounts in near real-time. want the property to have a value, which isn’t the case with valueless properties. Then it becomes an issue of constantly The disadvantages are that the customization opportunities monitoring the asset for when it does reach a valuable are reduced; requests for contact updates or eligibility threshold for processing. But if there is any cash on hand

6 7 related to those shareholders, the states want the cash and up-to-date information? without the stock. So, it becomes an extra issue to monitor JB: Industry expert releases (such as Keane’s), outside this. counsel dedicated to unclaimed property issues and participation in industry groups and associations. We sit on Transfer Agents & Keane’s Services the board of these associations and actively participate in all As a result of Keane’s Owner Location services, what committees related to unclaimed property. benefits have you seen in relation to managing your unclaimed property compliance? RF: I agree, transfer agents should monitor state unclaimed property regulations or partner with a firm or organization JB: We have seen the benefit of establishing contact with that does so. Also, once you’ve confirmed changes, there dormant, lost or deceased accounts. needs to be a process to amend your unclaimed property JU: Obviously the outreach has helped greatly in reducing procedures accordingly. the number of eligible accounts for escheatment year What are the benefits to your clients when accounts over year. Those additional outreaches are additional are successfully retained prior to escheatment? opportunities for shareholders to make contact with us. RF: If accounts are successfully retained prior to How have the results discussed in the previous escheatment, that’s an opportunity to educate instead of question impacted the overall health of the company’s to react or inform. A lot of shareholders don’t understand unclaimed property compliance? unclaimed property so it’s always good when you’re able to JU: By doing additional outreach, you’re reducing your retain the account and avoid a confrontation. pool of potential accounts to escheat, which reduces your JB: Client benefits are: continued shareholder engagement, risk factor when it comes to overall abandoned property potential additional investments and a positive shareholder compliance or noncompliance, right? So, from that relations experience. perspective, it’s an extremely beneficial process. JU: If clients took a deep dive and good look at the benefits JB: Any time you can mitigate risk and exposure to liability of maintaining shareholder contact, they would understand it’s a positive sign for the overall health of the program. that it’s in their best interest and overall more cost effective How does your company ensure they are handling for them to utilize outreach services.

unclaimed property efforts using the most accurate *Responses have been edited for length and clarity.

6 7 Where Liability Lies Third-Party Administrators and UP Compliance By Laurie Andrews, Director of Consulting

There have been a lot of questions around third party responsibility for escheatment. In this case, the TPA did not administrators (“TPA”) and whether or not they assume communicate with the financial institutions concerning the a company’s responsibility to track, monitor and report outstanding official checks and associated funds during the unclaimed funds. There is a lot of concern within the applicable dormancy period. Rather, the funds were retained unclaimed property industry, and the issue warrants further by the TPA for years before the financial institution, often a discussion. Generally speaking, a TPA is a firm that serves as successor to the original TPA client, was notified. Ultimately, a vendor that performs tasks related to accounting or record since the financial institutions were the “issuers” of the keeping functions that may impact unclaimed property official checks, the unclaimed property obligation remains compliance. Examples of TPAs are transfer agents, payroll with the financial institution while the TPA continues to processors, issuers of official checks, rebate processors, and assert that they are not responsible. To further complicate gift card administrators. this issue, depending on the state to which these funds are When using a TPA, the question becomes, who is responsible due, any associated penalties and interest may be borne for escheatment. The only way to know is to pull out the by the “issuer”. Finally, any indemnity obligations on the contract and read through it carefully. The language in part of the TPA for its failure to timely provide information the contract should define who is ultimately responsible regarding the funds, are likely to be found in the same for escheatment in the event that a transaction remains inaccessible services contract that would have defined uncashed or unused or an account becomes dormant. escheatment obligations in the first place. It is important to note that if the contract is silent on If you use the services of the TPA to perform functions that escheatment, the obligation remains with the company who could impact or result in unclaimed property, what steps meets the definition of “holder” under unclaimed property can you take to help protect your company from similar laws. Without a clear indication of intent to transfer the situations? First, be sure to review the contract to verify obligation to escheat, it will not rest with the TPA. that responsibilities for the functions that impact potential Recently, we’ve become of aware of a TPA who returned unclaimed property and the corresponding responsibilities to funds from uncashed official checks to financial institutions report and remit outstanding unclaimed property arising out years AFTER the funds were due to escheat. In fact, in many of the arrangement are clearly defined. cases, the checks were issued by predecessor entities and Is this enough? I say it isn’t. As a further safeguard, you the current financial institutions had no awareness of these should always, always, request copies of the escheatment checks, or the fact that they remained outstanding and reports filed on your company’s behalf to validate what’s uncashed. Several of these financial institutions no longer been escheated. This will confirm the TPA met the terms and even used the services of this TPA. Moreover, in many conditions of their contractual obligations. Copies of these cases the contract between the TPA and the entity or its reports should be maintained for a minimum of 10 years predecessor was so old that it was outside of the entity’s along with proof of payment. record retention requirements and therefore it was no longer Following these simple precautionary measures can help accessible. to reduce the unclaimed property risks associated with TPA This situation precluded the financial institutions from relationships. arguing that the TPA had the ultimate contractual

8 Update

By Joe Pollock, Vice President of Reporting

Keane Unclaimed Property System (KUPS) is progressing become available to all unclaimed property reporting clients as scheduled and we’ve made some exciting new during Q1 of 2020. This initial release of the client dashboard advancements. will not contain any non-public personal information. The Fall 2019 reporting cycle was the first in which Keane The KUPS client dashboard homepage includes a list of ran KUPS in a production environment. We processed just services provided, a calendar of client specific reporting over 55% of all client files through KUPS. This achievement events, primary contact information, links to useful Keane was possible due to the great effort and support from content, and current status information. The dashboard also Keane’s development, compliance and reporting teams. includes customized maps showing reporting deadlines, In this fall 2019 deployment, KUPS was only available for reportable property, and future due property. Workflow use by Keane’s internal operations personnel. During our information, validation, mailing information, and statistics Summer edition of Keanotes we shared the news that there are also available via the client dashboard. would be an externally facing component for our clients. We We can’t wait to share the KUPS client dashboard in Q1 are excited to announce that the KUPS Client dashboard will 2020.

9 Audit Update: Texas By Gary Joseph – Senior Manager, Consulting & Advisory Services Team Alex DeFruscio – Vice President, Sales

Introduction growing tech sector, with Fortune 500 companies, such as Apple, investing billions of dollars and hiring workers in The Texas Comptroller of Public Accounts (“TX CPA”) serves several of Texas’ largest cities. as the government body that administers and enforces compliance with the state’s unclaimed property statute. The Given Texas’ actions, we foresee many companies receiving TX CPA Unclaimed Property department has authorized, and audit notices by year’s end, and well into 2020. How do we currently oversees, hundreds of examinations of holders in know this? Because it has already begun… various industries including oil and gas, financial services, healthcare and manufacturing. Over the past several years, Texas Audit Notices these examinations were primarily performed by third party TX CPA has issued hundreds of audit notices over the auditors who are compensated based on a contingency fee past couple years, with many issued in the last quarter of tied to the amount of property deemed to be reportable 2019. As suspected, holders in the oil and gas industry to the state. As additional resources have been allocated are still a focus. Midstream and upstream oil and gas to the department, the TX CPA has also begun to conduct companies continue to be targeted for audits as many of examinations – having hired its own auditors who focus these companies struggle to stay in compliance; mainly due solely on unclaimed property examinations directly. to industry volatility (i.e. M&A activity). Additionally, the omission of otherwise standard property types not applicable As Texas’ economy continues to flourish, and its population in the oil and gas industry, such as accounts payable and continues to grow, it is not surprising that the state has receivables, continues to place a “bullseye” on many holders increased its efforts to ensure holders are in compliance with operating in the energy sector. its unclaimed property laws. The state is home to thousands of hospitals, banks and other financial institutions, and Holders who have received an audit notice from Texas serves as the energy capital of the US. It also has a rapidly through one of its third party auditors should be on the lookout for additional audit notices from other states.

10 This is due to the fact that most 3rd party audit firms Texas Audit Notices: Fintechs & Payment contract with many different states, and often solicit other Processors states to participate in an ongoing examination. Multiple We continue to see an uptick in financial technology participating states and the lack of uniformity of states’ companies (“Fintechs”) receiving audit notices. Just this past unclaimed property statutes create additional burdens on year, Texas authorized the examination of a vast number holders under audit. of Fintechs – many of which are household names that Many non-energy Texas holders mistakenly assume that the consumers use for retail, investments, and bill payment state’s focus on the energy sector reduces the risk that they services. As the Fintech industry is relatively new in terms of will be audited. As several holders in the financial services unclaimed property compliance, and continues to develop and securities sectors have realized in the fourth quarter of its product offerings through innovation, it is imperative that 2019, Texas does not have a single industry focus, and firms compliance with state unclaimed property laws is considered outside oil and gas are also subject to audit by Texas. proactively in order to ensure compliance into the future. Areas of special concern for Fintech firms center around the Texas Audit Notices: Financial Services & facilitation of payment processing between multiple parties Securities and the potential for inactive balances. Both situations Many of the recent audit notices issued by TX CPA were create an opportunity for unclaimed property exposure that directed to national and regional financial institutions, should be monitored and reported upon expiration of the some of which were audited before. While many of these dormancy period. Property resulting from failed delivery institutions may not be headquartered in the State of Texas, of disbursements, whether electronic or paper, should all have a jurisdictional nexus to the state in that they be researched to determine if there was an error in the maintain a physical presence or, at minimum, have account transmission to enable a follow-up disbursement. Balances owners or customers with a last known address in the owed to customers or clients should be monitored for state. Although presence does not dictate a state’s right to owner initiated activity to identify those at risk of becoming audit any holder to confirm compliance with its unclaimed dormant so proactive outreach can be conducted to re- property statute, the likelihood of a holder being audited by establish contact. a state in which it has a presence is higher than that in which Employing proactive measures such as these will help it does not. to ensure that properties at risk of being considered Historically, holders in the financial services industry have escheatable are identified, tracked and reported in reported the following property types: accordance with state requirements. These measures may • Checking & Savings Accounts also help reduce the overall amount of property due to the states as a result of successful reunification with the rightful • Certificates of Deposits (“CDs”) owners. • Individual Retirement Accounts (“IRAs”) • Outstanding Cashier & Other Official Checks Wrap Up! • Money Orders Awareness of current developments and audit activity at the state level provides a glimpse into the future as it relates Financial institutions that are required to file reports in Texas to unclaimed property compliance. Knowing where the that are not regularly reporting these property types risk states are headed and the approaches being employed, also subjecting themselves to audit. enables companies to take proactive measures to ensure In addition to financial institutions, many holders who issue that their unclaimed property compliance efforts address the security type properties recently received audit notices. The concerns being raised, and that records are maintained in apparent cause of the increase in audit notices focused on order to be responsive to auditor requests. securities is due to several third party audit firms expanding Through a combination of awareness and knowledge, their focus to this property type. Many of these firms have companies can reduce their unclaimed property exposures not historically conducted securities audits, and may have while also increasing their compliance with the spirit and decided to expand their ongoing general ledger (“G/L”) letter of unclaimed property laws, including a focus on focused examinations to include securities. preventing lost and dormant accounts.

11 Buried Treasure By Paul MacCready

Ever hear a story about a family that found a Model T in an The above are all examples of unclaimed property inventory old barn, a letter from George Washington in a stack of old items that are not owed. A last example of lost value for letters, a winning lottery ticket in a jacket, or a priceless companies are items that are property in the inventory but painting purchased at a yard sale? There’s a corporate do not need to be reported – these are items eligible for version of that kind of buried in plain sight treasure and statutory exemption. it’s actually more common and easier to find…if you know where to look. From experience, Keane knows the hiding How do we find it? places and how to separate the fool’s gold from the real Keane combines analytics with strategy and brute force. We thing. review client data, target opportunities and then conduct strategic outreach. Our objective is not just to confirm errors Where does it come from? but to obtain the documentation necessary to withstand an With advances in technology, we’ve noticed an increase inquiry by an auditor as to why the item was not reported. in reliance on automated systems. That approach is saving Only when a client accepts our findings do we mark the companies money in terms of effort but it is also allowing effort a success. items to flow into the escheat process that do not belong there. Examples include the following: Materiality • Duplicate payments for items already paid on a prior Everyone agrees that such items exist, but like unclaimed invoice. property itself, most believe volume must be immaterial. • Overpayments arising because your vendor applied Our experience begs to differ. Keane’s customizable process credits/rebates/etc to invoices you paid in full. can be deployed on an annual basis or for specific stand- alone projects. Clients maintain complete control through • Funds received but not reconciled due to a lack of a strict authorization process where they accept or reject documentation. Keane’s supported positions on an item by item basis. The • Internal administrative errors leading to inappropriate best part may be that Keane only charges a success-based escheat of items appearing to be overpayments or AR fee for accepted items and positions. credits. • Mistakes in communication with vendors or customers See page 13 for case study examples. that lead to inaccurate escheat.

12 Keane’s customizable process can be deployed on an annual basis or for specific stand-alone projects. Clients maintain complete control through a strict authorization process where they accept or reject Keane’s supported positions on an item by item basis. The best part may be that Keane only charges a success-based fee for items recognized and confirmed as accepted by the client.

13 Texas House Bill 3598 By Gary Joseph – Senior Manager, Consulting & Advisory Services Team Heather Gabell – Director, Compliance

Introduction unclaimed property to the state, as well as expands the Texas Comptroller’s (“TX CPA”) legal options of enforcement. The Turbulent… Volatile… Ever-changing… major changes in the bill include: These are a few of the terms by which the current unclaimed 1. Combined (“Consolidated”) Reporting property environment can be described. State unclaimed property laws are continuously evolving to keep up with 2. Continuing Reporting industry changes. Unfortunately, holders are experiencing 3. Record Retention operational and structural congruency conflicts, as these 4. Enforcement changes may not take into consideration holders’ unique industry challenges. The holder community, advocates, and other parties have all expressed concern with the new requirements, for a number On June 10, 2019, Texas House Bill 3598 was enacted. This of reasons. bill effectively changes the way holders are required to report

14 Combined Reporting Enforcement: Subpoena Power The state now requires that holders file a combined, or Per TX HB 3598, the state may obtain the assistance of consolidated, report for all affiliated entities under the parent the Texas Attorney General’s Office (“TX OGA”), banking company’s umbrella. The law defines an affiliated group as commissioners or any other State agency or political multiple entities of which a controlling ownership interest is subdivision of the state to enforce the unclaimed property possessed by a common entity. An entity is considered to law. Additionally, TX CPA is now authorized to issue have a controlling ownership interest if its equity or voting subpoenas to compel cooperation from the holder. In the interest in a company, directly or indirectly, meets or exceeds event the holder fails to comply with the subpoena, TX OGA 50%. can then be engaged to enforce the subpoena through legal suit. While many holders currently file under one entity, the state is now proactively requiring consolidated reporting. Other states, such as Tennessee, have adopted similar Holders not currently filing under one entity will be required provisions into their unclaimed property enforcement to consolidate their filing process, and report under one toolkits. As states continue to adopt various components common entity which may require a change in internal of the 2016 Revised Uniform Unclaimed Property Act, or procedure. It will also require an increase of interfacing RUUPA, we foresee additional states amending their statute between various departments or subsidiaries in an to incorporate this provision as it expressly conveys legal organization. means for the state to compel cooperation, as well as to evaluate and enforce compliance. One industry that will experience a significant paradigm shift in regard to TX HB 3598 is the oil and gas industry. Due to Conclusion structural and operational decentralization, many entities Holders and advocates are working with the TX Unclaimed segregate the accounts payable, receivables and payroll Property Administrator to further clarify expectations divisions internally from the revenue and land departments. with regard to TX HB 3598. As the Spring/Summer Filing This often results in the filing of two or more separate Date quickly approaches, we are standing by for new reports to the state(s). While there may be a benefit in administrative guidance from the state. consolidating the reports, the interaction between the departments will need to increase in order to comply with the state’s filing requirement.

Continuing Reporting & Record Retention TX HB 3598 now requires that holders file reports in each successive year after meeting the initial requirement to file. In the event a holder does not have property reportable to the state, a negative report must be filed with TX CPA in order to comply with Texas unclaimed property law. In prior years, there was not a requirement to file a negative report to the state. The bill also amends the record retention provision to now require holders to retain records for ten (“10”) years from the LATER OF: 1. The date of which the property becomes reportable; or 2. The date the report is filed. The provision applies regardless of whether the property was included in the aggregate.

15 Virtual Currency Update By Heather Gabell, Director of Compliance

Virtual Currency and RUUPA abbreviated extent) either include similar definitions of virtual currency in their law, or include virtual currency within the Virtual currency was first directly addressed in unclaimed definition of “property.” However, neither RUUPA nor any property in the Revised Uniform Unclaimed Property of these states provide further detail on handling virtual Act (“RUUPA”), a model act issued by the Uniform Law currency as unclaimed property under their laws. Commission in 2016. RUUPA defines virtual currency as a digital representation of value used as a medium of While states could argue that virtual currency falls under exchange, unit of account, or store of value, which does not their law’s “catchall” provision, the “catchall” generally have legal tender status recognized by the United States. requires that property be “due and payable. ” The verdict is The term excludes the software or protocols governing the still out on whether virtual currency is ever due and payable, transfer of the digital representation of value, game-related and if virtual currency providers have the necessary control digital content and loyalty cards (or gift cards). Those states over these assets to remit them to the state even if they do that have revised their laws based on RUUPA (Colorado, have the obligation to report them as unclaimed. Illinois, Kentucky, Tennessee, Utah, and Nevada, to an

16 NV S 44 – Effective 7/1/19 NY A 8314 – Pending Nevada enacted NV S 441, effective July 1, 2019. The Introduced on June 13, 2019, NY A 83144 provides that definition of “property” was revised to include virtual virtual currency escheats to the State of New York after a currency or interest, but a specific dormancy period/ 3-year dormancy period, if the entity holding it has engaged presumption of abandonment was not included. Note, in “virtual currency business activity” and the owner’s last however, that Nevada also updated its Reporting Manual2 for known address is in New York, or if the entity is incorporated Fiscal Year 2020 to include the following guidance: in New York (if the address is unknown). “Virtual currency “Virtual currency or interest” falls under the definition business activity” is defined in the bill as (i) receiving virtual of property and, as such, subject to unclaimed property currency for transmission or transmitting virtual currency, laws. Prior to July 1, 2019, virtual currency was deemed except where the transaction is undertaken for non-financial property under “a fixed and certain interest in intangible purposes and only involves a nominal amount of virtual property that is held, issued or owed in the course of a currency; (ii) storing, holding or maintaining custody or holder’s business” under NRS 120A.113. control of virtual currency on behalf of others; (iii) buying and selling virtual currency as a customer business; or (iv) The presumption of abandonment for virtual currency controlling, administering, or issuing a virtual currency. is covered under NRS 120A.500(1)(n), through June 30, 2019 and SB44 (2019) Section 11(1)(o) effective July 1, The comptroller is authorized to sell virtual currency, as soon 2019. For reporting purposes, the property-type code for as he or she deems practicable, at his or her discretion. virtual currency is MS17 “Miscellaneous Currency”. Liquidating virtual currency upon receipt means that a claimant would only be entitled to the proceeds of the As Nevada does not currently have the capability sale at the time of liquidation, and would not be entitled to receive virtual currency in native form, it is to be to any appreciation in value. This could be viewed as an liquidated prior to submitting the report, with the unconstitutional taking under the US Constitution. Further, cash value on the date of liquidation included on and it is more difficult for an owner to claim the virtual currency remitted with, the report. As reports are due before once it is liquidated by the state. November 1 of each year, it is recommended that the liquidation be no earlier than one month before Note that while the New York bill includes both a remitting the report and that the date for liquidation presumption of abandonment and a liquidation provision remain consistent from year to year.3 for virtual currency, the Nevada law simply defines virtual currency. The presumption of abandonment and liquidation Thus, virtual currency has been a reportable property type, language is provided only in the guidance set forth in the even prior to the law change and continues to be reportable recently updated reporting manual. under the catchall provision. Nevada also requires the holder to liquidate the virtual currency and include the date of 1 For the full text of NV S 44, see: https://www.leg.state.nv.us/App/NELIS/REL/80th2019/Bill/5963/Text. 2 http://www.nevadatreasurer.gov/uploadedFiles/treasurer.nv.gov/content/Unclaimed_Property/Forms/ liquidation and the cash value, on and with the report. Holder/Holder_Reporting_Manual.pdf, p. 5, 20. 3 Id. 4 For the full text of NY A 8314, or to check on the status of the bill, see: https://nyassembly.gov/ leg/?default_fld=&leg_ video=&bn=A08314&term=2019&Summary=Y&Actions=Y. ,

17 VDAs - Not Just for Delaware By Laurie Andrews, Director of Consulting

So much attention has been placed on Delaware’s Voluntary or longer, to complete your review and submit your Disclosure Program that I thought it would be a good time to report and other required documents. Some states will remind you that other states have programs as well. A VDA, provide an extension to get that work done, while others which stands for “Voluntary Disclosure Agreement,” like all will not. things unclaimed property, varies from state to state. Lookback: While it does vary, most states’ lookback There are ‘formal’ VDAs where you are essentially signing period is 10 years plus dormancy. This means you a contract with the state to come into compliance. Formal are required to review the past 10 report years. For VDA states often ask you to do a variety of things such as example, if you are reporting to a state that has a five- provide them with your formal unclaimed property policy year dormancy, you will be reviewing 15 years’ worth of and procedures, provide a self-review plan and perhaps even records. a phone call with a member of the state’s audit staff. In Penalties and Interest: Most states that have a formal other cases, they may ask you to submit your workpapers, VDA program will waive penalties and interest when a narrative describing your work efforts or just submit your coming forward voluntarily. Informal states generally report in the prescribed time frame. waive penalties and interest in recognition of your Then there are states that do not have a formal program. voluntary compliance too. For lack of a better term, we’ll call them the ‘informal’ VDA Audits: With the exception of Delaware, a VDA states. For informal states, while they don’t have a program does not formally protect you from an audit. The per se, they will often accept property determined to be states always retain the right to audit, however, in out of compliance with a cover letter advising them that my experience, most states will not issue an audit on you recognize you are out of compliance and would like to a holder who has submitted a VDA so long as it is voluntarily come into compliance with their state. complete and the agreed upon requirements are met. Usually when I talk about VDAs, people have five questions: California: The state controller is statutorily required How long after I file the VDA is the report due? How far to prepare a report on developing a one-time amnesty back do I need to review my books and records? What program or other opportunities to increase compliance about penalties and interest? If I file a VDA, does that mean in lieu of an amnesty program. I won’t get audited? And, will California ever have a VDA program? Let’s break it down: I know it’s complicated, so if you have an out of compliance situation, contact us. We can provide you with state-by- Timing: Some states require that you submit your state guidance to help you get a clean slate. finalized VDA as soon as 90 days after acceptance in to their program while other states allow you six months,

18 Revised Uniform Unclaimed Property Act (RUUPA) Inspired Legislation by State

WA NH VT ME MT ND RUUPA Round Up OR MN MA By Keane Compliance Team ID SD WI NY WY MI RI CT IA PA NV NE NJ OH UT IL IN DE WV CO MD CA VA DC KS MO KY NC TN AZ OK NM AR SC

MS AL GA

TX LA

AK FL PR HI VI

LEGEND

Legislation Passed Legislation Failed or Withdrawn Legislation Pending

Disclaimer: The above graphic depicts states that have proposed, passed, failed, or withdrawn Revised Uniform Unclaimed Property Act (RUUPA) inspired legislation as of December 10, 2019. The graphic does not constitute legal opinion or legal advice, and should not be relied upon without first verifying the same with your internal or external counsel. ©2019 Keane

The 3 most recent adopters of RUUPA are Nevada, to an abbreviated extent, followed by Main and Colorado (in terms of their effective dates). The chart below highlights the major departures from RUUPA.

Provision 2016 RUUPA NV S (eff. 7/1/19) ME S 481 (eff. 10/1/19) CO S 88 (eff. 7/1/20) Pre-presumption outreach + duty to confirm death required Same as RUUPA but no pre- presumption outreach required IRAs 3 years after the later of Same as RUUPA Same as RUUPA 1st/2nd RPO and the earlier of and no requirement to confirm (70.5 and 2 yrs. after confirma- death tion of death) Other Tax Same as RUUPA but deceased 30 years after account open Deferred Unchanged from current law owner provision reduces dor- Same as RUUPA date Accounts mancy to 2 years

Depends on type of Pre-presumption outreach communication sent. required. • First class mail at least 1st or 2nd RPO. If email comm. annually: RPO is trigger Securities Unchanged from current law Same as RUUPA is followed by 1st class mail • Electronic mail (with owner that is RPO, 3 yrs. after RPO consent): if pre-presump- tion outreach is RPO, trig- ger is date of last contact

Sale of 3 years Unchanged from current law 1 year 3 years Securities

Same as RUUPA but Values 60-180 days prior to filing must be summed to arrive at report 1st class mail + email if Same as RUUPA but can 60-120 days 1st class mail + the $50 threshold. Due owner consented to electronic send via first class mail OR email if owner consented to For securities > $1,000, notice Diligence mail delivery via email if owner consented electronic mail delivery must be sent notice via certified Specific content required to electronic mail delivery mail no less than 60 days before filing report

Transitional 10 years Unchanged from current law None 5 years Provision

Disclaimer: *For additional departures from the previously existing laws in Nevada, Maine and Colorado, please visit the Legislative Alerts section of our website.

19 Holders Eagerly Await News from the IRS and Treasury By Heather Gabell, Director of Compliance

Since its release in May 2018, Internal Revenue Service account without prior authorization from the account owner. (“IRS”) Revenue Ruling 2018-17 has raised significant legal In September 2018, members of the Holders Coalition, and operational concerns for holders. Under the Ruling, the the Investment Company Institute (ICI), and the Securities escheatment of an IRA to the state constitutes a designated Industry & Financial Markets Association (SIFMA), met with distribution, subject to a 10% federal tax withholding. the IRS and the Department of the Treasury to underscore The trustee or custodian of the IRA must also report the the need for additional discussions and a reasonable designated distribution on a Form 1099-R. timeframe for implementation. Because of their efforts, the Various associations, professional organizations and trade IRS formally extended the deadline for compliance with the groups have since voiced their concerns to the IRS and withholding and reporting requirements for escheated IRAs Treasury Department. Chief among these concerns are to January 1, 2020 under Revenue Ruling 2018-90 . potential violations of federal securities laws which are On July 23, 2019, SIFMA sent a letter to the IRS and Treasury, designed to protect investors. Under these laws, holders are and included the following suggestions, which would allow precluded from liquidating even a portion of a customer’s holders, owners and the IRS to identify that the assets are

20 IRAs that have escheated to the state, and make it easier for reporting IRAs subject to tax withholding, assuming that the beneficiaries to claim them: January 1, 2020 deadline remains in effect: 1. a distribution code on Form 1099-R; and Holders reporting [IRAs] should make use of the NAUPA 2. confirmation that the reporting and withholding will Standard Deduction and Withholding code “TW” to occur in the deceased owner’s name, if a beneficiary represent “Income Tax Withheld”. cannot be located or is unknown. The value “TW” should be recorded in the PROPERTY The Holders Coalition sent a follow-up letter to the IRS and record in the PROP-DEDUCTION-TYPE field. The amount Treasury on November 19, 2019, echoing the concerns of Federal Tax Withheld should be stored in the PROP- raised by SIFMA, as detailed above, and further requesting DEDUCTION-AMOUNT field. This code should be used an exemption from the 10% withholding amount for IRAs for any taxes withheld from remitted properties. registered to deceased owners, where there are unknown or The value of the property before the deduction should lost beneficiaries. be stored in the PROP-AMOUNT-REPORTED field. The The Holders Coalition also formed a joint committee with amount remitted to the state after the Federal Tax NAUPA, to broker a shared effort that seeks assistance and Withholding should be stored in the PROP-AMOUNT- guidance from the IRS and Department of the Treasury REMITTED field. (“Treasury”). The letters from SIFMA, the Holder’s Coalition, and NAUPA On November 21, 2019, NAUPA submitted a letter to the all request an additional extension for implementation IRS and Treasury, expressing its concerns with respect to purposes, and appeal to the IRS and Treasury for continued the withholding and reporting of IRAs. NAUPA expressed communication and feedback. If the IRS and Treasury do not concerns similar to those raised by SIFMA and the Holder’s issue an additional extension, holders should be prepared to Coalition, and urged the IRS and Treasury to issue additional perform the withholding and reporting requirements after guidance or provide an extension for compliance with the January 1, 2020. Revenue Ruling. 1 https://www.irs.gov/pub/irs-drop/rr-18-17.pdf 2 NAUPA then issued the following guidance to holders for https://www.irs.gov/pub/irs-drop/n-18-90.pdf

View the full NAUPA guidance on our blog: www.keaneup.com/blog

21 Litigation Update By Heather Gabell, J.D., Director of Compliance

State of Delaware ex rel. William Sean and defrauding the state. French v. CVS Health Corporation, et al. CardFact Ltd. was incorporated in the State of Ohio and Qui Tam Action Involving Gift Card Structure Dismissed sold its gift card services business to Card Compliant, LLC in 2009. CVS Pharmacy, a Rhode Island corporation and This qui tam action was brought by a former employee of a wholly owned subsidiary of CVS Health, a Delaware CardFact under the Delaware False Claims and Reporting Act corporation, entered into a Card Services Agreement with in 20171. Plaintiff-relator French alleged that CVS Health CardFact Ltd. in 2008, under which employees of CVS Corporation (CVS), along with several other defendants, Health managed the gift card program with Card Services. including Card Fact, LLC, intentionally failed to escheat unclaimed gift cards to Delaware, and had conspired to CVS Health received a Notice of Examination in September represent Card Services and its related entities, as the holders 2013, informing the company that Kelmar would be of the gift cards, violating Delaware’s unclaimed property law conducting an audit to determine compliance with

22 Delaware’s unclaimed property law. Kelmar requested that must escheat the membership deposits 3 years after they are CVS Health issue a litigation hold notice so that all gift card payable or distributable. records could be included within the scope of the audit. Filed in June 2019 as ClubCorp II4, the people of California In December 2017, CVS Health entered into a Voluntary alleged that ClubCorp violated the Unfair Competition Law Disclosure Agreement (VDA) with the state, resolving the and California’s False Claims Act, based upon underlying audit. alleged violations of the unclaimed property law. CVS Health successfully argued in its Motion to Dismiss that ClubCorp removed both actions to federal court on the basis French’s claims were barred under 6 Del C. § 1206, which that the state’s claims raised substantial questions of federal prohibits actions that are based upon the same allegations law, based on the federal common law rules established in or transactions that are the subject of an administrative the Texas v. New Jersey5 trilogy, which determine escheat proceeding. The court agreed that because CVS Health jurisdiction. was already under audit at the time of the filing of the lawsuit, the administrative proceedings bar applied. The The US District Court for the Northern District of California court also dismissed the allegations against the Card Services granted the Controller’s motion to remand to California state 6 defendants based on the same principle. CVS Health court on October 3, 2019 . While the court did not find that also cited an earlier case with the same relator and nearly ClubCorp’s arguments were proper for a removal jurisdiction identical facts – “Card Compliant II.”2 case, the judge took special note of the following arguments made by ClubCorp as follows: The Court further noted that under the doctrine of collateral estoppel, because French had already litigated the same • The Supreme Court’s decisions impact what property a issues and lost in the prior action, he was collaterally state may escheat, and may not be superseded by states estopped from litigating same issues in the instant case (even and naturally affect every states’ escheatment laws. “In though CVS was not a party to the original action). order to adjudicate escheatment claims, then, all states necessarily have to apply federal common law.”7 Yee v. ClubCorp Holdings, Inc. – Remand • The California provision permitting the state to establish Order that an owner resides in the state based on tax records, An Unexpected Victory for Holders etc. may be preemptive and violative of federal common law which can be raised as a defense. The California Controller’s Office filed two separate actions against ClubCorp and its affiliated subsidiaries, seeking an 1 2019 WL 4668353 (Del. Super. Ct. Sept. 24, 2019). injunction to perform an unclaimed property audit, and a 2 2017 WL 1483523 (Del. Super. Ct. Apr. 21, 2017). 3 Yee v. ClubCorp Holdings, Inc., et al., Case No. 3:19-cv-03953-WHA. declaratory judgment that ClubCorp’s membership initiation 4 People of the State of California v. ClubCorp Holdings Inc. et al., Case No. 3:19-cv-03972-WHA. 5 379 U.S. 674 (1965), together with Pennsylvania v. New York, 407 U.S. 206 (1972), and Delaware v. deposits, which are to be contractually refunded after 30 New York, 507 U.S. 490 (1993). 6 Yee v. ClubCorp Holdings Inc., et al., 2019 WL 4866370 (U.S. D Court, N.D. California, Oct. 3, 2019). years, constitute unclaimed property. In ClubCorp I3, filed in 7 Id at 3. May 2019, the Controller alleged that as a holder, ClubCorp

Stay Up To Date on Unclaimed Property News! Subscribe to the Keane Unclaimed Property Newsletter, Keanotes distribution and/or Legislative Alerts at: www.keaneup.com/resources/newsletter

23 Keane Expertise Spotlight: Debbie L. Zumoff, JD Executive Advisor

Since joining Keane in 1984, Debbie Zumoff has earned active within multiple the distinction of being one of the company’s most industry trade associations experienced, knowledgeable, and longest tenured such as NICSA, SIFMA, the employees. With a Juris Doctor degree from Villanova Securities Transfer Association, University School of Law and a Bachelor of Arts degree and the Shareholder Services in Psychology from Arcadia University, Debbie started her Association. She has also represented career at Keane by assuming the in-house compliance Keane as a corporate affiliate to the National Association of function, becoming Keane’s key subject matter expert on State Treasurers and the National Association of Unclaimed many unclaimed property regulations as Chief Compliance Property Administrators. Debbie also speaks regularly at Officer, and led the Consulting and Advisory Services team various industry conferences, and has addressed regulatory from 2016-2018. From the start, Debbie was instrumental in agencies and legislative bodies on the scope and impact of growing the firm from one that focused solely on reuniting changes in the unclaimed property arena. individuals with their lost or missing financial assets to its current iteration; providing a full suite of outsourced In addition to Debbie’s many accolades, she contributed to compliance and consulting services to more than 600 clients. the formal drafting process of the 1995 Uniform Unclaimed Her field expertise is respected among industry executives Property act, collaborated with peers to defeat the and state administrators alike, which has facilitated her work unpopular unclaimed property legislative initiative in Ontario, representing corporate holders in support of audit defense Canada, provided feedback to the Securities and Exchange and negotiating Voluntary Disclosure Agreements. In 2018, Commission in the initial drafting of SEC Rule 17Ad-17, Debbie transitioned from her long-standing role as Keane’s later gave input to the US Government Accounting Office Chief Compliance Officer and Consulting National Practice on SEC 17Ad-17 compliance, and served as an Observer to Leader to Executive Advisor. the Uniform Law Conference RUUPA Drafting Committee from 2013 through 2016. Debbie is an unclaimed property Debbie’s impact on the unclaimed property industry is superstar that has authored many whitepapers, blogs, difficult to quantify. As a founding member of the Unclaimed articles and has been featured in Corporate Compliance Property Holders Liaison Council (UPHLC), the predecessor to Insights, CFO.com, USA TODAY, Compliance Week, WSJ.com the Unclaimed Property Professionals Organization (UPPO), and National Public Radio. Debbie participated on its Communications, Education and Agenda, Marketing, and Legislative Committees through Through Debbie’s 35+ years with Keane, she has helped to the years. Debbie also served as the Board liaison to the expand the company’s service offerings and client base, as By Laws and Leadership Development Committees, and well as draw additional experts to Keane’s staff including was recognized in 2005 with the Team Player Award. Most multiple seasoned former state unclaimed property officials, notably, over the years she served in multiple roles on the former third-party auditors, industry experts, attorneys, UPPO Board of Directors and as its President while also Certified Public Accountants, Certified Fraud Examiners, and Certified Internal Auditors.

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The content presented in this newsletter represents Keane’s understanding of evolving legislation and case law governing unclaimed property compliance up to its publishing date. The content is provided for informational purposes only and should not be considered legal advice or legal opinion. For more information, please contact Melissa Steinrock, General Counsel and Chief Compliance Officer, at 646-770-9207 or via e-mail at [email protected]. ©Keane 2019

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