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THROUGHOUT THE YEARS, THE CLIENT OWNED AN ANUITY WHICH TRANSFERRED AMONG SEVERAL DIFFERENT INSURANCE COMPANIES DUE TO BANKRUPTCIES AND MERGERS. THE ANNUITY WAS NOT PURCHASED THROUGH EDWARD JONES. THE CLIENT EVENTUALLY LIQUIDATED THE NON QUALIFIED ANNUITY AND TRANSFERRED THE FUNDS TO EDWARD JONES TO BE INVESTED. THE CLIENT FEELS THAT THE FUNDS SHOULD HAVE BEEN ROLLED OVER. SHE IS NOW PROTESTING THE TAX THAT HAS TO BE PAID ON THE SALE OF THE ANNUITY. SUBSEQUENT INFORMATION RECEIVED ON OR ABOUT 8/3/05 REVEALED TAX CONSEQUENCES THAT WOULD TRIGGER A FILING.
Damage Amount Requested
$5,000.00
Settlement Amount
$6,000.00
Broker Comment
THE IR REVEIEWED THIS ANNUITY WITH THE CLIENT, BUT HE WAS NEVER APPRISED THAT THE INITIAL INVESTMENT WAS $ 11,000.00 WHICH WAS MADE IN 1982. THE IR WAS LED TO BELIEVE THAT THE INVESTMENT WAS APPROX. $ 30,000.00 IN 1999. SINCE THE VALUE HAD INCREASED ONLY SLIGHTLY FROM THAT AMOUNT, THE IR SUGGESTED LIQUIDATING THE INVESTMENT AND PURCHASING MUTUAL FUNDS. THE IR BELIEVED AT THE TIME BASED ON THE INFORMATION OR LACK OF INFORMATION PROVIDED BY THE CLIENT THAT THERE WOULD BE MINIMAL TAX CONSEQUENCE. THE IR NEVER WOULD HAVE SUGGESTED THE SALE OF THIS ANNUITY IF HE HAD BE APPRISED OF THE TRUE COST BASIS. SINCE THE CLIENT INCURRED APPROXIMATELY $8,500.00 IN STATE AND FEDERAL TAXES DUE TO THIS MISUNDERSTANDING, THE FIRM ELECTED TO ASSIST THE CLIENT WITH THESE TAXES AND REIMBURSED HER FOR $6,000.00 OF THIS AMOUNT.
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.
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.