A Sin of Omission

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Jun 26, 2005 8:32 pm

In another thread somebody is bragging that they ACATed out of Merrill 1.4 million.



He went on to say that the client would have a great case against Merrill if he, the client, were a vindictive type.



I suggest that if a registered rep is aware of an individual who has a
winning hand in arbitration they owe it to that person to suggest that
the person pursue an aribtration claim.



Let the chips fall where they may.  If a person was truly
manhandled they should seek relief through arbitration--that's why the
system exists and an RR who fails to suggest it is guilty of looking
the other way.



I cannot imagine opening an account with an RR who didn't care enough
about me to explain that a current or former broker was liable for
wrongful actions.

Jun 26, 2005 9:33 pm

I'm the bragger, Put.  250K+ of proprietary B shares.  New money was being added to B shares.  Had been going on for several years.  Is it worth a go?  There's some other stuff, too.  But, in the current environment with the scrutiny on mutual fund sales practices, this seems like a lay-up to me.  Thoughts?..............

Jun 27, 2005 5:58 am
Soothsayer:

I'm the bragger, Put.  250K+ of proprietary B
shares.  New money was being added to B shares.  Had been
going on for several years.  Is it worth a go?  There's some
other stuff, too.  But, in the current environment with the
scrutiny on mutual fund sales practices, this seems like a lay-up to
me.  Thoughts?..............







See, this is illustrative of the reality of today's brokers. 
Things have been so good for so long that you have no sense of
reality.  Selling B shares is a lay-up arbitration case?



Ridiculous.



A lay-up arbitration case would be an 80 year old widow with index
options confirmations--or anybody with a "Fist Full of Forex."

Jun 27, 2005 8:46 am

Stay out of it. You don't know what took place. The client may have insisted on B shares and doesn't have the guts to tell you how stupid he was.

Jun 27, 2005 9:05 am

Bottom line is a little more than 20K of lost performance since this started.  Client did not know the difference between A, B, and C shares.  Hmmm, proprietary B shares.......sound familiar?  Put, if you don't think Merrill would cough up that 20K and little bit more with one well written letter from a securities litigation attorney, then you've been out of this business longer than I thought.

Jun 27, 2005 6:15 pm
Soothsayer:

Bottom line is a little more than 20K of lost performance since this started.  Client did not know the difference between A, B, and C shares.  Hmmm, proprietary B shares.......sound familiar?  Put, if you don't think Merrill would cough up that 20K and little bit more with one well written letter from a securities litigation attorney, then you've been out of this business longer than I thought.


Clients lie so they don't look stupid. You should know that by now.

Jun 27, 2005 6:27 pm
Soothsayer:

Bottom line is a little more than 20K of lost
performance since this started.  Client did not know the
difference between A, B, and C shares.  Hmmm, proprietary B
shares.......sound familiar?  Put, if you don't think Merrill
would cough up that 20K and little bit more with one well written
letter from a securities litigation attorney, then you've been out of
this business longer than I thought.





I have mixed emotions on this one.  On one hand there's lots of
frivolous arbitration cases out their by clients who got greedy,
thought they had it all figured out, and now that they've lost they're
looking for a 'partner' to share their pain! "Oh yes but nobody told me
I could LOSE money in that technology fund.....!"



Then again, I hate to see people get screwed, and that's what the arbitration system is there for!



Just remember, if you encourage them, they get a successful settlement,
and one day you lost them money....you're now the next target of
opportunity!  My former compliance manager always got nervous when
he heard that a client had recently been involved in a lawsuit or
arbitration!

Jun 28, 2005 8:14 am

I always ask people about prior experiences with brokers. Don't ask if they've ever sued anyone. Just ask how it was resolved. If they have a history of suing brokers, I don't take them.

Jun 28, 2005 10:59 pm
annuity guy:

I always ask people about prior experiences with
brokers. Don't ask if they've ever sued anyone. Just ask how it was
resolved. If they have a history of suing brokers, I don't take them.





Gee, as you call yourself "annuity guy", I can see why!




Jun 29, 2005 11:35 am
inquisitive:
annuity guy:

I always ask people about prior experiences with brokers. Don't ask if they've ever sued anyone. Just ask how it was resolved. If they have a history of suing brokers, I don't take them.



Gee, as you call yourself "annuity guy", I can see why!



Somebody has to make the big bucks. Might as well be me.

Jun 30, 2005 12:30 am

Somebody has to make the big bucks. Might as well be me.


[/quote]


Who gives a sh*t about the clients?  It's all about you, right?  LOSER! 

Jun 30, 2005 6:29 am
annuity guy:
inquisitive:
annuity guy:

I always
ask people about prior experiences with brokers. Don't ask if they've
ever sued anyone. Just ask how it was resolved. If they have a history
of suing brokers, I don't take them.



Gee, as you call yourself "annuity guy", I can see why!



Somebody has to make the big bucks. Might as well be me.





Has anybody ever heard of an annuity sale that was not sold?  By
that I mean it is my conclusion that nobody, but nobody, reviews all
the products that are available and decides that what they really want
is an annuity.



Instead they are sold in the sense that the round peg customer is
hammered through the square hole annuity by a salesman who has no other
products to sell and is damned well going to sell something.

Jun 30, 2005 7:58 am
Put Trader:
annuity guy:
inquisitive:
annuity guy:

I always ask people about prior experiences with brokers. Don't ask if they've ever sued anyone. Just ask how it was resolved. If they have a history of suing brokers, I don't take them.



Gee, as you call yourself "annuity guy", I can see why!



Somebody has to make the big bucks. Might as well be me.




Has anybody ever heard of an annuity sale that was not sold?  By that I mean it is my conclusion that nobody, but nobody, reviews all the products that are available and decides that what they really want is an annuity.

Instead they are sold in the sense that the round peg customer is hammered through the square hole annuity by a salesman who has no other products to sell and is damned well going to sell something.



What did you do with the money that you were supposed to use for smartening school?

Jun 30, 2005 8:23 am
annuity guy:

I always ask people about prior experiences with brokers. Don't ask if they've ever sued anyone. Just ask how it was resolved. If they have a history of suing brokers, I don't take them.



You don't want a client that has a history of suing brokers.

Jun 30, 2005 8:28 am
Soothsayer:

Bottom line is a little more than 20K of lost performance since this started.  Client did not know the difference between A, B, and C shares.  Hmmm, proprietary B shares.......sound familiar?  Put, if you don't think Merrill would cough up that 20K and little bit more with one well written letter from a securities litigation attorney, then you've been out of this business longer than I thought.



$20k of "lost performance" isn't in and of itself grounds for a suit, neither is the fact the funds were proprietary. $250k in B shares, depending on how they got them (one lump sum, small amounts over time) may be, but perhaps someone from ML can tell us what their sales policy has been over the past few years. If it's like most every other wirehouse it's evolved to smaller and smaller max B share sales.


As far as the client not knowing the diff between the various classes of shares, it could be true, it could be smoke. Then again, I wouldn't be surprised if ML has a form on file with the client's signature on it saying they were informed of the differences.


Jul 1, 2005 12:38 am

Client did not know the difference between share classes.  He was too busy building a business.  Client did not sign any letter.  Ever. Period.  End of story.  I always say that your clients will find out the truth--sooner or later.  Don't do anything so shortsighted, selfish, and stupid that a good, trained eye can't pick it up in a 30-second cold-eyes review.  The broker was all of the above.  My trained eye caught it.  The client felt betrayed, then got pissed and moved his account.  For the record, the client has not mentioned sueing Merrill, nor have I suggested it.  However, I have a client on my book as of this moment who sued Morgan for the exact same thing on a 100K purchase.  He won a rather sizeable chunk in arbitration.  That is an absolute fact.  I am not making it up. 

Jul 1, 2005 7:25 am
Soothsayer:

Client did not sign any letter.  Ever. Period.  End of story.  





Plaintiff's attorny stores are filled with, "....than damn if they didn't produce a document where my client acknowledged......"



Unless you have entered the discovery phase of an arbitrtion or
litigation case you have no idea what a client did and did not sign.



Why do you suppose brokerage houses are so williing to settle
arbitration?  Let's say with B share issues--what do you think
Morgan Stanley was afraid of that they settled for a "big chunk" with
your client?

Jul 1, 2005 7:27 am
Put Trader:



Plaintiff's attorny stores are filled with, "....than damn if they didn't produce a document where my client acknowledged......"






I wonder if using a wireless keyboard will cause crazy typos if the
batteries are weak?  I think I'll change batteries, and stop
watching the news at the same time my fingers are flying across the
keys.

Jul 1, 2005 8:51 am
Soothsayer:

Client did not know the difference between share classes.  He was too busy building a business.  Client did not sign any letter.  Ever. Period.  End of story.  I always say that your clients will find out the truth--sooner or later.  Don't do anything so shortsighted, selfish, and stupid that a good, trained eye can't pick it up in a 30-second cold-eyes review.  The broker was all of the above.  My trained eye caught it.  The client felt betrayed, then got pissed and moved his account.  For the record, the client has not mentioned sueing Merrill, nor have I suggested it.  However, I have a client on my book as of this moment who sued Morgan for the exact same thing on a 100K purchase.  He won a rather sizeable chunk in arbitration.  That is an absolute fact.  I am not making it up. 



The client was probably some idiot who thought that he was too cool to pay a commission and that he would beat the system by buying B shares.


I think you're mad because you want to churn him out of his funds and he doesn't want to pay the CDSC.


Your $100,000 guy is lying. Best case, he won the CDSC, which is not a "sizable chunk."

Jul 1, 2005 8:52 am
Soothsayer:

Somebody has to make the big bucks. Might as well be me.



Who gives a sh*t about the clients?  It's all about you, right?  LOSER! 


[/quote]



Thank you for your kind words.