Allegations
IN A MAY 11, 2004 EMAIL TO THE BRANCH MANAGER, CUSTOMER STATED "I LOOK FORWARD TO MEETING WITH YOU TO REVIEW MY PORTFOLIO." HE ALSO STATED THAT HIS FINANCIAL ADVISOR WAS "INSTRUCTED TO SELL ANY STOCK BEFORE IT LOST MORE THAN $2,000 SO WHY WAS (SIC) MANY OF MY STOCKS ALLOWED TO DROP MUCH MORE? HE WAS ALSO INSTRUCTED NOT TO PURCHASE MORE THAN $10,000 IN ANY ONE STOCK. (HE INVESTED $30,000 IN CRESCENT REAL ESTATE WITHOUT MY KNOWLEDGE." IN A MAY 18, 2004 FOLLOW UP EMAIL TO THE BRANCH MANAGER, CUSTOMER STATED THAT "$128,000 FOR FEES AND COMMISSIONS OVER A PERIOD OF LESS THAN 8 YEARS SEEMS TO BE A LARGE AMOUNT ON AN IRA ACCOUNT OF LESS THAN $250,000." CUSTOMER ALSO STATED THAT HE WAS TOLD HIS ACCOUNT "WAS DOING AS GOOD AS THE S&P OR BETTER, BUT YOU'RE TELLING ME THAT THE S&P GAINED 61% AND THE DOW 71% VS 16% ON MY ACCOUNT FOR THE SAME PERIOD OF LESS THAN 8 YEARS.
Damage Amount Requested
$18,000.00
Settlement Amount
$13,500.00
Broker Comment
I HAVE BEEN CLAIMANT'S FINANCIAL ADVISOR FOR APPROXIMATELY TEN YEARS. DURING THE LATE 1990S, CLAIMANT CHOSE TO PURSUE A GROWTH STRATEGY THAT APPEALED TO HIS INVESTMENT GOALS. DURING THAT TIME, HIS ACCOUNT CLIMBED FROM APPROXIMATELY $240,000 TO OVER $450,000. AS WITH OTHER INVESTORS WHO PURSUED GROWTH INVESTMENT STRATEGIES, CLAIMANT'S PORTFOLIO SUFFERED LOSSES IN 2000 AND 2001. THREE YEARS AFTER THE DOWNTURN IN THE MARKET, IN MAY OF 2004, I MET WITH CLAIMANT AND MY BRANCH MANAGER TO DISCUSS CLAIMANT'S ACCOUNT (WHICH WAS THEN WORTH APPROXIMATELY $300,000). AT NO TIME DURING THIS MEETING OR OTHERWISE DID CLAIMANT EVER SUGGEST HE HAD GIVEN ME INSTRUCTION TO: (A) SELL ANY STOCK THAT LOST MORE THAN $2,000, OR (B) PURCHASE NO MORE THAN $10,000 IN ANY ONE STOCK. INDEED, AFTER THIS MEETING, CLAIMANT REQUESTED THAT I REMAIN HIS ADVISOR AND MY BRANCH MANAGER AGREED. THIS MEETING WAS THE LAST TIME WE DISCUSSED ANY CONCERN CLAIMANT HAD ABOUT HIS ACCOUNT AND THERE WAS NO DISCUSSION AT THAT TIME OF ANY MONETARY SETTLEMENT. ON JANUARY 28, 2005, I TRANSFERRED MY EMPLOYMENT TO RAYMOND JAMES. AROUND SIX WEEKS THEREAFTER, I LEARNED THAT UBS HAD FILED A U4 STATEMENT AFTER I HAD LEFT THEIR EMPLOYMENT. THIS WAS THE FIRST I HEARD OF ANY ADDITIONAL CONCERNS THAT MAY HAVE BEEN RAISED BY CLAIMANT AND, SINCE I HAD ALREADY LEFT UBS, I WAS NOT INVOLVED IN THE RESOLUTION OF THE ISSUE.