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Wealth Professional | 26 May 2015, 09:05 AM Agree 0
A “Chairman’s Club” financial advisor may have exposed her firm to hundreds of millions of dollars in damages stemming from a long-term affair with a client.
  • George C. Dobbie | 26 May 2015, 10:21 AM Agree 0
    $40,000,000 divide by 12,000 = $3,333 per trade. One hopes there was a lot of excellent advice and planning that came with those trades, as the mere transaction must have been simply a few key strokes.
  • ian polzin | 15 Jun 2015, 08:12 PM Agree 0
    As a regulated financial advisor ,
    when there is a conflict of interest it is a requirement to take appropriate action . by the advisor and the manager

    Compensation is a requirement of disclosure as well as conflict of interest and kyc appropriateness of investments.since rate of return was not the issue at this age but conservation of assests what the advisor did was in contravention of all prudent advice..She has to prove otherwise or that in itself was a crime.

    The manager of the brokerage/dealer, if aware must take required action.

    . IN this case they would appear to be party to the action unless they could prove incompetence but that is another issue.

    It does'nt mean it can't occur it just means disclosure must occur with all parties and that extra precautions should have been taken.

    Almost every trade of an advisor is monitored both electronically and by a manager to its appropriateness .

    Without discretion/disclosure/Appropriateness the managing brokerage becomes liable for the actions of the advisor. Remember all advisors are monitored. That doesnt vindicate the advisor but adds people to the list of defendents .
    Trades of significance are monitored not randomly but as a policy .

    It requires intervention by a manager to avoid this monitoring .

    In this case, up until his death we had a willing senior blinded by lust or love and a very astute advisor with ulterior motives who knew the rules and found a willing or greedy manager to assist in the crime.
    .
    In most cases like this it is common to find greed is the motivation and negligence is tool of the crime
    The innocent party in this case is the spouse and as advisor's we must recognize the impact of our actions on all parties.

    In cases like this the regulator body and the advocacy body should demonstrate the significance of the case by immediate license suspension until the case goes to court or judgement made .

    The manager /managers should be suspended and charged with accessory to the crime.
    Without their participation it wouldnt have continued for so long.
    This advisor demonstrated pure greed and her accomplices were her managers and yes they were aware simply by the volume of trades and the assets under management.

    If she were just managing the assets of her lover , she may not be completely negligent ,"Caveat Emptor " But advisors have a higher duty of care than the public is aware and that would nulify the buyer not making the right decisions but simply following what the advisor recommends ,Thus the advisor is negligent for not walking away.
    this is not a legal advice but my opinion.

    it appears she was the manager of the family assets which would include the unwilling spouse and now we have a crime of control without knowledgeable consent .

    This is an opinion and not legal advice, imp
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