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Aug 7, 2006 11:18 am

A question for those of you who work for Jones and/or those of you who run your own shops as part of LPL, RJFS, or the others.


If a client decides that you are the reason their portfolio underperformed and ends up talking to an attorney.


Will the attorney who represents your B/D also represent you as part of their obligation to the B/D--or will you be expected to obtain your own counsel?

Aug 7, 2006 11:51 am

Apparently the LPL attorney will represent me to a point.  Having said that, his  primary obligation is to his employer , not me.  If discussions developed  past anything but the most preliminary stage I would retain my own attorney.

Aug 7, 2006 12:05 pm
joedabrkr:

Apparently the LPL attorney will represent me to a point.  Having said that, his  primary obligation is to his employer , not me.  If discussions developed  past anything but the most preliminary stage I would retain my own attorney.


So when y'all talk about how much money you're making are you including setting aside a warchest for potential legal fees?


What if the arbitration goes against you?

Aug 7, 2006 12:32 pm

That's what E&O is for.

Aug 7, 2006 12:37 pm
Indyone:

That's what E&O is for.


What is your premium on that, for how much coverage, and what is your deductible?

Aug 7, 2006 12:39 pm
NASD Newbie:
Indyone:

That's what E&O is for.


What is your premium on that, for how much coverage, and what is your deductible?



Newbie I thought you are or where in mangagement?  Would you not know this?

Aug 7, 2006 12:44 pm
Greenbacks:
NASD Newbie:
Indyone:

That's what E&O is for.


What is your premium on that, for how much coverage, and what is your deductible?



Newbie I thought you are or where in mangagement?  Would you not know this?



I ask questions to lead to discussions.  When I say things people start whining that I am a know it all.

Aug 7, 2006 12:45 pm

$170/mo


$5,000,000/$20,000,000


$5,000-$20,000 depending on claim size


You've now exceeded your daily question limit, so if you need anything else, check back tomorrow...I've got work to do.

Aug 7, 2006 12:52 pm
Indyone:

$170/mo


$5,000,000/$20,000,000


$5,000-$20,000 depending on claim size


You've now exceeded your daily question limit, so if you need anything else, check back tomorrow...I've got work to do.



Does your policy protect you regardless of the allegation?

Aug 7, 2006 12:54 pm
NASD Newbie:
Greenbacks:
NASD Newbie:

[quote=Indyone]That's what E&O is for.[/quote]


What is your premium on that, for how much coverage, and what is your deductible?


Newbie I thought you are or where in mangagement?  Would you not know this?



I ask questions to lead to discussions.  When I say things people start whining that I am a know it all.



Gee Mister Newbie, why in tarnation would anyone be sayin' that 'bout you?!?! 

Aug 7, 2006 3:04 pm

You are such the little catalyst.

Aug 7, 2006 4:25 pm
NASD Newbie:
Indyone:

$170/mo


$5,000,000/$20,000,000


$5,000-$20,000 depending on claim size


You've now exceeded your daily question limit, so if you need anything else, check back tomorrow...I've got work to do.



Does your policy protect you regardless of the allegation?



Similar to Indyone, with different levels of coverage for non brokerage and brokerage related business.


Obviously we aren't protected or covered if we are convicted of fraudulent acts.  But until that is proven, we are covered.  My B/D is the insured and I am listed as an additional insured under that policy as an individual.   The coverage doesn't extend to agencies or entities that the individuals may work for as a part of the independent structure.  Like any insurance policy, there are also deductibles which are based on the type of business on which the claim is based.


EDJ doesnt'/didn't offer any E&O coverage.  We were told that the company would stand behind us if we were sued.   Riiiiight.


Aug 7, 2006 4:30 pm
babbling looney:
NASD Newbie:
Indyone:

$170/mo


$5,000,000/$20,000,000


$5,000-$20,000 depending on claim size


You've now exceeded your daily question limit, so if you need anything else, check back tomorrow...I've got work to do.


Does your policy protect you regardless of the allegation?



Similar to Indyone, with different levels of coverage for non brokerage and brokerage related business.


Obviously we aren't protected or covered if we are convicted of fraudulent acts.  But until that is proven, we are covered.  My B/D is the insured and I am listed as an additional insured under that policy as an individual.   The coverage doesn't extend to agencies or entities that the individuals may work for as a part of the independent structure.  Like any insurance policy, there are also deductibles which are based on the type of business on which the claim is based.


EDJ doesnt'/didn't offer any E&O coverage.  We were told that the company would stand behind us if we were sued.   Riiiiight.




I am still amazed that EdJones doesn't offer liability coverage.

Aug 7, 2006 4:35 pm

How about coverage if you're a transaction oriented broker?


Suppose all you do is manage speculator accounts in the futures market?


My point is this--how can an insurance company possibly extend coverage to an individual who might decide to churn an account because he would be protected from liability by his E&O coverage?

Aug 7, 2006 5:07 pm
NASD Newbie:

How about coverage if you're a transaction oriented broker?


Suppose all you do is manage speculator accounts in the futures market?


My point is this--how can an insurance company possibly extend coverage to an individual who might decide to churn an account because he would be protected from liability by his E&O coverage?



Aug 7, 2006 5:15 pm
babbling looney:
NASD Newbie:

How about coverage if you're a transaction oriented broker?


Suppose all you do is manage speculator accounts in the futures market?


My point is this--how can an insurance company possibly extend coverage to an individual who might decide to churn an account because he would be protected from liability by his E&O coverage?



OOPS....wrong button.



Obviously we aren't protected or covered if we are convicted of fraudulent acts.   The same goes for illegal activities.  You are not protected.


In addition the deductible for transaction types of activities is much higher than that for life insurance and so on.   Should the insurance company decide to settle the claim, and they often do so despite the protests and innocence of the agent, the agent is responsible for the deductible.


How can an insurance company possibly extend coverage to a driver who might get into an accident by driving in the fast lane on the LA Freeway?  They do it by overcharging the many to cover the costs of the claims against the few. 

Aug 7, 2006 6:27 pm

What a patient group of people.  Honestly, this NASD seems like a waste of skin. 

Aug 7, 2006 6:42 pm
babbling looney:

How can an insurance company possibly extend coverage to a driver who might get into an accident by driving in the fast lane on the LA Freeway?  They do it by overcharging the many to cover the costs of the claims against the few. 


That's not a good analogy.  A person who intentionally drives dangerously is concerned about his own demise.


A broker who intentionally churns an account suffers in no way if he or she knows that there will be an insurance company standing behind them.


Unless you are a rouge broker your B/D should defend you with the same attorney who is engaged to defend them.


You should not need E&O insurance if you're honest, and if you're not you should not be eligible for it.

Aug 7, 2006 6:46 pm

rouge?  stinkin' commie brokers!



Aug 7, 2006 6:57 pm
NASD Newbie:
babbling looney:

How can an insurance company possibly extend coverage to a driver who might get into an accident by driving in the fast lane on the LA Freeway?  They do it by overcharging the many to cover the costs of the claims against the few. 


That's not a good analogy.  A person who intentionally drives dangerously is concerned about his own demise.


A broker who intentionally churns an account suffers in no way if he or she knows that there will be an insurance company standing behind them.


How many ways can I say it??  The insurance company will NOT stand behind you if you are churning, twisting or participating in any other forbidden activity.  NOT NOT NOT......


Unless you are a rouge broker your B/D should defend you with the same attorney who is engaged to defend them.


You should not need E&O insurance if you're honest, and if you're not you should not be eligible for it.


So you don't need homeowners insurance or uninsured motorist coverage because you don't play with matches and you drive carefully?  E&O insurance is to protect us against unintentional errors, omissions and against frivolous claims from clients.