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Administrator of client's estate alleges financial advisor violated his fiduciary duty owed to client by permitting the POA to name himself as sole beneficiary of client's account when he allegedly knew client had diminished capacity.
Broker Comment
After completion of the firm's investigation, petitioner's claim was denied. Client's estate was processed in accordance with client's intent.
3/3/2009
Customer Dispute
Denied
Allegations
1/02-12/06; CLIENT STATES THE FA WAS WRONG TO ADVISE HIM THE PURCHASE THE BONDS THAT ARE CURRENTLY HELD IN HIS ACCOUNT. CLIENT REQUESTS THAT THE FULL AMOUNT INVESTED BE RETURNED TO HIS ACCOUNT IMMEDIATELY. BOND VALUES ARE DOWN APPROXIMATELY $82,627.00.
Damage Amount Requested
$5,000.00
Broker Comment
ACCORDING TO OUR RECORDS, THE FIXED INCOME INVESTMENTS CURRENTLY HELD IN THE ACCOUNT WERE PURCHASED QUITE SOME TIME AGO. AT THE TIME OF THE PURCHASES, THE CLIENT WOULD HAVE RECEIVED TRADE CONFIRMATIONS WHICH DETAILED THE TRANSACTIONS. SINCE THE PURCHASES, THE CLIENT HAS RECEIVED STATEMENTS WHICH HAVE PROVIDED INFORMATION RELATED TO THE INVESTMENTS HELD IN THE ACCOUNT AS WELL AS REFLECTING ACCOUNT ACTIVITY. ACCORDING TO THE FA, THE BONDS HAD INVESTMENT GRADE RATINGS AT THE TIME OF THE PURCHASES AND THE INVESTMENTS WERE WITHIN THE SCOPE OF THE CLIENT'S OBJECTIVES. WE CERTAINLY UNDERSTAND THE CLIENT'S CONCERNS RELATED TO THE DECLINE IN THE VALUE OF THE BONDS; HOWEVER, MARKET FLUCTUATION IS A RISK ASSOCIATED WITH INVESTING. IN ADDITION, WE HAVE BEEN EXPERIENCING UNPRECEDENTED, TUMULTUOUS MARKET CONDITIONS WHICH HAVE HAD A SIGNIFICANT IMPACT ON VALUATIONS. AS LONG AS THE BONDS ARE HELD (AND THE ISSUER IS NOT IN DEFAULT), THE CLIENT SHOULD CONTINUE TO RECEIVE INTEREST ON THE FULL PRINCIPAL AMOUNT REGARDLESS OF THE MARKET VALUE OF THE INVESTMENTS. BASED ON OUR REVIEW, WE ARE RESPECTFULLY DENYING THE CLIENT'S REQUEST FOR A REIMBURSEMENT OF THE FULL AMOUNT INVESTED.
A brokerage firm, also called a broker-dealer, is in the business of buying and selling securities – stocks, bonds, mutual funds, and certain other investment products – on behalf of its customer (as broker), for its own bank (dealer), or both. Individuals who work for broker-dealers - the sales personnel are commonly referred to as brokers.
IA
Investment Adviser
An investment adviser is paid for providing advice about securities to clients. In addition, some investment advisers manage investment portfolios and offer financial planning services.
Disclosures
Disclosures can be customer complaints or arbitrations, regulatory actions, employment terminations, bankruptcy filings and certain civil or criminal proceedings that they were a part of.
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Disclosures can be customer complaints or arbitrations, regulatory actions, employment terminations, bankruptcy filings and certain civil or criminal proceedings that they were a part of.