I Think I Am In Trouble

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Sep 12, 2006 5:38 pm

Hi, I have been reading this stuff for a long time and find it to be very informative.


I am in my first year at UBS and I made a mistake a couple of weeks ago.


I have a client who has been in Florida for a month.  About two weeks ago I heard something about a stock that I thought was really good news so I bought 2,000 shares in his account without talking to him.


Well the stock went down about $3 per share since then and I am worried that when he gets home on Thursday he is going to notice it on his statement and will be mad.


Do any of you have experience with something like this.  How can I make him understand that I only had his best interest in mind and that I am sorry that he is losing right now.


I am pretty sure that he would have bought it if I had talked to him about it before I bought it for him, but he was in Florida.


Would it be a good idea to try to explain that if he sold it he would get some writeoffs which would help offset gains on other trades he has made.


He is 68 years old and is a retired veternarian.  His wife is blind, but it is not her account.


Thank you for your advise.

Sep 12, 2006 5:58 pm

You're pretty much screwed dude.  I would tell your branch manager yourself before the client calls him.

Sep 12, 2006 5:58 pm

Please tell this is a joke!!!

Sep 12, 2006 6:04 pm

Please tell ME this is a joke!!!

Sep 12, 2006 6:10 pm
Mike Damone:

You're pretty much screwed dude.  I would tell your branch manager yourself before the client calls him.



I think if I tell the manager she will fire me.  My friend says I should just get with the client as soon as he gets home and offer to pay him back $500 per month until it is payed off.


My friend says that if I get fired I won't be able to get another job and I really do think I have what it takes to be a good advisor.


He thinks my client will understand as long as I am honest with him right up front.  I wonder if the client might say it is OK with him and he will wait for the stock to go up again.  Maybe he will, I hope so.


I wish I had never heard that rumor.  It wasn't even news as it turns out.

Sep 12, 2006 6:12 pm

I'm assuming that this is not a discretionary account and that this is not a prank post.  If so, I'm having a hard time trying to understand what possessed you to trade without talking to the client.  I cannot imagine a quicker way to torpedo your career.  Obviously, you're going to have to come clean with the client and hope and pray that the client is willing to endorse your actions.  If not, you may have just written your ticket right out of the industry.


If this is a discretionary account, you'll probably have nothing worse than a client questioning the wisdom/timing of your trade.  If this is non-discretionary, you've probably got arbitration an a pink slip from UBS.


...and best of luck trying to find another firm to pick you up after that...sorry...

Sep 12, 2006 6:12 pm
P G D M:
Mike Damone:

You're pretty much screwed dude.  I would tell your branch manager yourself before the client calls him.



I think if I tell the manager she will fire me.  My friend says I should just get with the client as soon as he gets home and offer to pay him back $500 per month until it is payed off.



LOL! 


Sep 12, 2006 6:13 pm

"...offer to pay him back $500 per month until it is payed off."


Wow...wait until Bill Singer gets hold of THAT one!!!

Sep 12, 2006 6:16 pm
Indyone:

I'm assuming that this is not a discretionary account and that this is not a prank post.  If so, I'm having a hard time trying to understand what possessed you to trade without talking to the client.  I cannot imagine a quicker way to torpedo your career.  Obviously, you're going to have to come clean with the client and hope and pray that the client is willing to endorse your actions.  If not, you may have just written your ticket right out of the industry.


If this is a discretionary account, you'll probably have nothing worse than a client questioning the wisdom/timing of your trade.  If this is non-discretionary, you've probably got arbitration an a pink slip from UBS.


...and best of luck trying to find another firm to pick you up after that...sorry...



That is why I want to pay him back.  He is a nice man and as long as I am trying to make it right he should be OK with it.  Dont you think?


Why would he want to screw up my life by complaining if I am trying to do the right thing?  Most people are very nice.  At least I think so.

Sep 12, 2006 6:17 pm
Indyone:

"...offer to pay him back $500 per month until it is payed off."


Wow...wait until Bill Singer gets hold of THAT one!!!



Does Bill Singer work for UBS?  I have never heard of him.

Sep 12, 2006 6:20 pm
P G D M:

I think if I tell the manager she will fire me.  My friend says I should just get with the client as soon as he gets home and offer to pay him back $500 per month until it is payed off.


My friend says that if I get fired I won't be able to get another job and I really do think I have what it takes to be a good advisor.


He thinks my client will understand as long as I am honest with him right up front.  I wonder if the client might say it is OK with him and he will wait for the stock to go up again.  Maybe he will, I hope so.


I wish I had never heard that rumor.  It wasn't even news as it turns out.



Ha ha ha. Good joke buddy.


Laughed so hard almost peed my pants.

Sep 12, 2006 6:27 pm

This must be NASD Newbie being bored and jerking our chains. 


Either that... or this has to be the most clueless person on earth.

Sep 12, 2006 6:29 pm

Why did you place the trade? Was the account discretionary or non?



Did you do it by accident?

Sep 12, 2006 6:30 pm

P G D M,


I hate to sound harsh, but to be honest, I DO think you are in some serious trouble that is likely to ruin your opportunities in this field.  I wish I could tell you that it isn't so.  Yes, I know you were trying to do something good for a client, but now you can obviously see the error of your ways.  Your friend is giving you bad (and I believe illegal) advice.  Sure, it may work, but if you're caught, it will undoubtably lead to sanctions which may very well include being barred from the industry  The best advice I can give you is to not make this worse by piling on a second infraction on top of the first.  Your first visit and confession should be to your BOM or an attorney.  If you're afraid of your BOM, see the atty first, but you'd better get on this tomorrow.  The longer it goes, the worse it may be for you.  Imagine if the stock drops another $6-7/share...or worse!


You'll probably have a lot of folks kick your head in and tell you how dumb it was to do what you did.  I'm going to take the position that such chastisement is counterproductive at this point.  I honestly feel sorry for you because it's apparent that you like what you do and undoubtably, the next few days/weeks/months, even are likely to be unpleasant as you resolve this.  Just know that waiting will only make it worse.


Good luck.

Sep 12, 2006 6:33 pm

What he did was wrong and stupid, but do you think the client would have the same reaction if his 2,000 shares were UP $3.00?

Sep 12, 2006 6:33 pm
babbling looney:

This must be NASD Newbie being bored and jerking our chains. 

Either that... or this has to be the most clueless person on earth.


I'm voting NN, but just in case, I tried to give him some advice...wow...

Sep 12, 2006 6:34 pm

"Did you do it by accident?"


...this gets funnier by the minute...

Sep 12, 2006 6:35 pm
babbling looney:

This must be NASD Newbie being bored and jerking our chains. 


Either that... or this has to be the most clueless person on earth.



The answer is "A". Notice his obvious absence at this ridiculous story.

Sep 12, 2006 6:41 pm
Mike Damone:

What he did was wrong and stupid, but do you think the client would have the same reaction if his 2,000 shares were UP $3.00?


That is exactly right.  That is why I do not think he will want to hang me.


I have been thinking of asking him to hold the stock if I give him the difference between what it is when he gets back and what he payed for it.  Then if it is sold for more than he payed for it he could split the profit with me and I might be able to get a lot of my money back.


Does that make sense?

Sep 12, 2006 6:43 pm
P G D M:
Mike Damone:

What he did was wrong and stupid, but do you think the client would have the same reaction if his 2,000 shares were UP $3.00?


That is exactly right.  That is why I do not think he will want to hang me.


I have been thinking of asking him to hold the stock if I give him the difference between what it is when he gets back and what he payed for it.  Then if it is sold for more than he payed for it he could split the profit with me and I might be able to get a lot of my money back.


Does that make sense?



Not really.  You're pretty much fired.  Good luck.