From my blog,

In Slate magazine, Timothy Noah writes that brokers should be held to a fiduciary standard, citing the following example offered by securities attorney Stuart Meissner:

Meissner’s clients, Claire and Alex Moskvin of West New York, N.J., sold their house in 2006 for $975,000. They told their broker at Wachovia (since purchased by Wells Fargo) that they wanted to invest the money for a year or two and then retrieve it to buy a new house. The Moskvins suggested treasury or municipal bonds, where the principal would be insured. Instead the Wachovia broker steered them into mutual funds. When the market crashed and the Moskvins lost $227,000, they sued. “The defense,” Meissner told me, “was basically that [Wachovia] didn’t have a fiduciary duty.” The case went to arbitration, and the Moskvins won about $90,000, but Meissner believes they would have won much more had Wachovia been statutorily bound to the stricter standard to which the Moskvins assumed, in their ignorance, it already adhered.

Read the full post here:

I'd love to know what you think about this example....and what other ones you might offer.