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Investor Protection

An Elderly Man Walked into a Bank ...

May 20, 2020

by Howard Haykin



An elderly man walked into a bank branch with $40,000 in his pocket. He deposits $30,000 in a bank savings account and, with the help of a representative, opens a self-directed brokerage account with the remaining $10,000. Kinda sounds like a Wells Fargo story – which it was.
And while FINRA focused on the representative, who stole or converted $16,560 from the customer’s accounts, let us focus on the elderly customer and wonder aloud ... What business did he have opening a self-directed brokerage account? Little to none, based on the facts of the case. As I said, this is a Wells Fargo story.



HOW THE CONVERSION WENT DOWN.    Without the customer’s knowledge or consent, the representative opened an individual brokerage account in the customer’s name at an unaffiliated broker-dealer. The representative later opened a ‘joint’ brokerage account in his and the customer’s name at that same broker-dealer. Over a 12-month period, the representative transferred $16,560 from the customer’s savings and brokerage accounts into these bogus accounts, which he used for personal expenses. And all that time, the customer apparently had no idea he had been ‘robbed’.



CUSTOMER TAKE AWAYS.    Wells Fargo and other financial institutions offer 'one-stop shopping' – which can be a win-win situation so long as those various services provide value to the investor/customer - and so long as the individual can manage those multiple services. In the above case, the elderly customer apparently could not. Which raises the issue of recognizing an individual's need for assistance with making those assessments. An independent financial watchdog can fulfill those needs, providing that the watchdog's livelihood or career depends on the quality, and not the quantity, of the clients' financial accounts and relationships.


Financialish can help investors focus on their financial needs and financial accounts.



[For further details, click on … FINRA Case #2019064268201.]