New Hampshire this month became the first state to pass a law aimed at curtailing the misleading use of senior and retiree financial designations that is based on a model rule written by the North American Securities Administrators Association (NASAA), joining a growing number of states that are enforcing rules against abuses by financial advisors in this area.

   The model rule was written in April by NASAA, a Washington, D.C.-based organization of securities administrators from across the continent. The Model Rule on the Use of Senior Certifications and Professional Designations prohibits the misleading use of senior and retiree designations used by salespersons, whether registered or not, that confers the impression they have special qualifications or specialized education in addressing the needs of senior citizens or retirees, particularly in areas of finance, financial planning, estate planning, or investing.

    New Hampshire is the first state to pass legislation based on that model; two other states' regulatory bodies have enacted rules based on the NASAA proposal. The difference is that some states do it through their legislators and some do it through their regulators, says NASAA spokesman Bob Webster.

   Virginia regulators adopted their rule earlier this month, and Washington state's rule goes into effect on July 20. Alabama, California, Florida, Missouri, Montana, and North Dakota also have begun the process to adopt rules based on the NASAA model. And more are expected to follow, Webster says.

   Mark Connolly, New Hampshire's director of securities regulation, says punishment could range from fines to disciplinary action against broker-dealers, registered reps or investment advisors. "It depends on the infraction," he says. "There is no specific penalty."

   Connolly says New Hampshire's statutes set the violation at $2,500 per infraction, which he says is defined by the facts and circumstances of a case.

   Ron Thomas, director of Virginia's Division of Securities and Retail Franchising, says infractions would result in a fine of $5,000 per incident.

   In Washington, fines could amount to as much as $10,000 per incident, says Mike Stevenson, the state's securities administrator.