E&O Insurance...Jones?

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Jun 1, 2006 11:45 pm

Which firms allow it and which firms do not? I realize Jones doesn't have it. What liability to do you have as a broker working for a wirehouse without it? What about if you work for a bank? What about Indy? How much is it?

Jun 2, 2006 12:16 am

I don't have my stuff in front of me, but it runs $400+ per quarter for an indy at LPL...from what I've seen, that's very reasonable.

Jun 2, 2006 12:28 am

What does it cover?

Jun 2, 2006 12:33 am

Jones brokers don't have E&O insurance?  Or they simply don't pay for it?  

Jun 2, 2006 9:08 am

I've seen most indy BDs offering E&O coverage for between $150-250/mo.

Jun 2, 2006 9:55 am

Jones brokers don't have E&O offered by the company. The company says they will stand behind you if you are sued by a client.  You can buy your own policy if you want to but it is pricey and most individual policies don't like to cover securities business.


I pay $200 a month and it covers securites as well as insurance business.  You must have an E&O policy before any insurance company will let you contract with them. 


Covers errors and omissions, mistakes you made that clients may sue you for. It obviously won't cover you for outright fraud.  But I believe that you are covered for claims against losses as long as you have operated legally, used due dilligence in selecting clients investments etc.

Jun 2, 2006 10:54 am
babbling looney:

Jones brokers don't have E&O offered by the company. The company says they will stand behind you if you are sued by a client.




Pure 100% Fuc#ing Bull Sh#t! I know for a fact, I was sued by a client and was told by JONES that if the court ruled in favor of the client the amount rewarded would be subtracted from my pay at Jones. A GP high up the ladder told me that it was the price you pay for being in this business and that we do not have insurance. True story. Fortunately the court did not rule in favor of the client. It took about a year to end the whole thing. It was pure hell for me knowing that this issue would have bankrupted me and made my U4 look bad. No support what so ever from the greedy people in St Louis. This is just one more reason for anybody who works for Jones to go indy and buy the insurance. Yeah I was told about the incredible back office help- technology and legal support, but where the hell were they when I needed them? Just another way for the GP's to extract more money from a new-new to keep the big dogs fed. More people who are considering employment by Jones need to hear these stories.....and people want to know why exjoners are so bitter....Nothing against you Babs but I had to get this off back..keep on spreading the word of the Wolf in sheeps skin. F those idiots! I see better than I hear.


Jun 2, 2006 10:59 am
jonesescapee:
babbling looney:

Jones brokers don't have E&O offered by the company. The company says they will stand behind you if you are sued by a client.



Pure 100% Fuc#ing Bull Sh#t! I know for a fact, I was sued by a client and was told by JONES that if the court ruled in favor of the client the amount rewarded would be subtracted from my pay at Jones. A GP high up the ladder told me that it was the price you pay for being in this business and that we do not have insurance. True story. Fortunately the court did not rule in favor of the client. It took about a year to end the whole thing. It was pure hell for me knowing that this issue would have bankrupted me and made my U4 look bad. No support what so ever from the greedy people in St Louis. This is just one more reason for anybody who works for Jones to go indy and buy the insurance. Yeah I was told about the incredible back office help- technology and legal support, but where the hell were they when I needed them? Just another way for the GP's to extract more money from a new-new to keep the big dogs fed. More people who are considering employment by Jones need to hear these stories.....and people want to know why exjoners are so bitter....Nothing against you Babs but I had to get this off back..keep on spreading the word of the Wolf in sheeps skin. F those idiots! I see better than I hear.




Hold on a second...there's a small issue that doesn't ring true here, and maybe it's just an inadvertant choice of words on your part.

You were SUED?  Hoping the COURT didn't rule against you?  Aren't all NASD member firms bound to deal with dispute resolution in ARBITRATION?  Don't clients sign and agreement that binds them to that?  This would mean if a client tried to sue you in COURT, the judge would generally dismiss the case and send it to NASDR for ARBITRATION!

Having said that, the scenario you describe otherwise does not shock me.  There are a few good decent fair folks in this biz(I think I've found a good group of them in LPL management) but here are also a lot of sleazy greedy people who would sell their mother if they could make a profit.

"I see better than I hear."  Reminds me of one of my favorite sayings:  "Your actions speak so loudly I can't hear a word you're saying."

Jun 2, 2006 11:04 am

J


you are correct, it did go to the NASD for arbitration, however the rest is true of no support. I do stand corrected

Jun 2, 2006 11:35 am

I didn't say that they would acutally stand behind you.  Just that they say that they would.    I never believed them.  They lied about almost everything else.....why would that be the truth. 

Jun 2, 2006 11:42 am
babbling looney:

I didn't say that they would acutally stand behind you.  Just that they say that they would.    I never believed them.  They lied about almost everything else.....why would that be the truth. 


Babs, I'm with you all the way. there was just something in the post that ignited the bomb.

Jun 2, 2006 12:11 pm
joedabrkr:



"I see better than I hear."  Reminds me of one of my favorite sayings:  "Your actions speak so loudly I can't hear a word you're saying."


I've always said it as, "What you ARE shouts so loudly at me, I cannot hear what you SAY." I like your version too, good sentiment.

Jun 5, 2006 9:02 pm

Babs: "Covers errors and omissions, mistakes you made that clients may sue you for. It obviously won't cover you for outright fraud. But I believe that you are covered for claims against losses as long as you have operated legally, used due dilligence in selecting clients investments etc."





I bet Doug Hill would have liked to have some E&O Insurance!! Or would it have been considered fraud what he did (or should say didn't do)

Jun 5, 2006 9:04 pm

What other wirehouses offer it? I realize if you are independent then you should get it because you are on your own.

Jun 5, 2006 10:19 pm

Most independent firms offer a group rate.  My cost is about $2000 a year.  When I was looking into E&O for insurance business, not securities, it was about $800 a year.   


Don't know about wirehouses.  Anybody who is there may have some information.  It think you are on your own in any case.