84 Year Old Takes on Edward Jones for Unauthorized Trading

An elderly St. Louis man has filed a FINRA arbitration claim against Edward Jones and one of its financial advisers. The elderly client alleges that the financial adviser over-rode his objections to liquidating over a thousand shares of Cigna. Those shares were held in the client’s 401(k) before rolling over to an Edward Jones IRA. The financial adviser informed the client that Edward Jones would not permit him to retain such a high concentration of one share in the IRA once the rollover was completed. According to the client, he didn’t give a damn because he had dedicated his life to his employer, which ultimately became Cigna.

As bad luck would have it, the elderly gentleman had a good thing going with his Cigna shares. But the young FA liquidated almost all of them, using the proceeds to purchase favored mediocre-performing mutual funds. The commissions must have been smashing but the retirement account missed out on approximately $900,000 in appreciation in the Cigna shares.

According to the Statement of Claim, which contains allegations that still must be proven, the FA’s murky self-serving account notes do not jive with what the FA admitted to the elderly gentleman’s wife and daughter. Notably, there isn’t a single piece of paper signed or initialed by the client which evidences his consent to the liquidation of his beloved shares. Wouldn’t you think that is something a broker-dealer would want to obtain as a matter of course? Who knows - maybe you can use discretion in a non-discretionary account, as long as you stick a trade confirmation in the mail. But what if you are a broker-dealer that is willing to change trade confirmations after the fact? Food for thought. And once again folks – these are mere allegations until proven to the satisfaction of a Panel.

For more information regarding unauthorized trading, see Douglas Schulz's article "Unauthorized Trading, Time and Price Discretion & the Mismarking of Order Tickets:" http://www.jurispro.com/files/documents/doc-1066206599-article-2051.pdf