As another note; when you speak to the brokerage firm, make sure to ask for the name, and telephone number, of the COMPLAINCE OFFICER. This is the position charged with ensuring all activity conducted by the firm is in complaince with the NASD regulations. (FINRA used to be the "NASD", the "National Association of Securities Dealers"). "C" also has a right to request the broker's information, as to any past violations and license status. Consumers are generally unaware of the large amounts of rights they have when dealing with an investment firm. I can attest to how scared brokers get when "violation" is mentioned! The regulatory agencies do hand out large, (and I do mean LARGE!) fines and suspensions. As a similar example, I once shut down a customers trust, because the customer himself was taking out too much money! Yes, it was his money, but his spending was against the purpose of the trust, and I had to act in his best interest for his own sake!). Another thing to look for was the "activity" in the investments. Be prudent and review the investments for activity. If it seems there were a lot of "trades", the broker may have been "churning" the account to generate commissions for himself (another violation). Possibly have someone you trust review the account and activity with an objective perspective. Once again, "C" has more rights than she realizes right now. The trust was et up for her, and to help her well being. The activity described here is criminal, period.
It certainly is. But given the grandparents' attitude, I can see why. They feel guilty because their daughter won't get a big inheritance? Why can't she get her butt out and work like they did?
Getting ducks in row C is here w/ me right now, and has read all the responses. She is ready to move ahead and do everything that is necessary to get this under control. She is also ready to file the police reports and see her mother take responsibility for what has occurred. Her broker has told her twice now that the back up files and records are "no longer available" b/c "they had changed locations and their system had changed so the records are no longer available." Should I quote this in C's letter to the compliance officer? That sounds absurd to me, and C feels she is just getting jerked around b/c she is young and the broker assumes she has no clue what to do about this mess. C also verifies that the trust was created when she was born. She thinks that the original amount of the fund was probably $100,000.00 although no one has confirmed this. She is now receiving a monthly statement but nothing at all about the past status of the account, withdrawals, etc. She has requested this by phone several times, so we are fully aware we have to write letters. Any other advice at this point? We are going to put the ducks in the row this coming week and see what reply we get from the brokerage firm. It will take a while to get her credit reports by mail. Thank you so much for your help. C is starting to feel more empowered w/ this now and it is all b/c of everyone's help on this forum. We simply did not have a clue what we could do. Essentially, C has assumed she has just gotten screwed and nothing she could do but suffer through the damage. Oh - btw - C told me this evening that b/f her 21st b/day (she thinks she was 19) a Sheriff's deputy showed up and took her to jail b/c a judgement had been entered against her. She was totally shocked, and completely fell apart at the seams. She was taken to jail and finger printed her, mug shot, the whole thing. She had no idea what this was for. Turns out it was b/c of a creditor that her mother had not paid. Somehow, her mother had put the bill in C's name. Her mother got a bondsman and bailed her out. C has no idea what this was for . . . or how/if it was paid, etc. Her mother just told her it was nothing and to forget it. C didn't understand at all and just tried to put it out of her mind. At this point, she is very frightened. Any other ideas - send them on. We are forging ahead. I am sure I am going to need a lot more support from all of you in the coming days/weeks. Thank you so much!!!!
it looks as if her credit report is maube screwed up already, so she may not hurt it a lot by getting another inquiry. So, mabye there's a mortgage company, that she could go to, proof her identity and get them to pull her credit report and give her a copy? Or a car dealer, that you may know? Or maybe a property management company? That would speed up the knowledge of what actually shows up. Then she can already be prepared once the hard copies from in from the cra. Just a thought.
Good for you C, this is the most important step in all of this! The records better be available! There are regulations covering retention of records, and it does NOT matter that the firm moved. They are still requied to "protect and maintain" the records. Go straight to the compliance officer, skip over the broker! Absolutely, ask for the compliance officer, and demand the records within 24 hours. Cover yourself by putting this is a letter to him, (document everything from this point!). I would put "CC: FINRA-local office" on the bottom of the letter. No wonder everyone is nervous, assuming an average 10% rate on this account, it would be worth about $800,000.00 now! This is a starting point for you, you can get a rough picture of how much should be in there, and hence how much has been "withdrawn". These are the intital steps to take: 1) Get credit reports from all three agencies (you're in process for this, so good) 2) Get records for trust, not just recent monthly statements, but ORIGINAL account agreements. Yes, the brokerage firm will have these, keep pushing. 3) Go to your local county courthouse, look up Public Records in "C"'s name, you can try doing this over the internet. Judgements, etc. will be posted as reocrds. 4) "C"'s credit reports will also list her "Public Records" when she receives them. 5) Put a "Credit Freeze" on "C"'s credit reports. 6) Not to worry you any more, but demand from the brokerage firm all previous 1099-INT copies. These are the "income" tax forms given out for interest taken from an account. This will not include "principal" (the portions fo the original $100K), but interest/capital gains earned through the account. We don't want to discover "C" also owes back taxes... Hopefully, the bleeding has stopped now, with no more withdrawals from the account. But be on the safe side, put "credit freezes" on her reports. You also will probably want to put a "Public Notice Publication" in your local newspaper that "C", or her assets, are not responsible for any debts incurred by her mother. Consult an attorney for this move. Keep us posted, Good Luck and Be Strong..
Also, since the secret question mentioned a mortgage - maybe it was just proforma or maybe her mother did get a mortgage in C's name. Most counties have tax records or even mortgage records on the internet. Search for 'tax collector' and your county and/or 'recorder' and your county and see what you find. Then search if there are any properties in C's name? Maybe the parents Qc'd their house into her name and then refinanced. Don't want to scare you more, but if the mother didn't stay away from other fraud, then who knows what else is out there. If there's nothing on the web, then there's the option to go to the local courthouse and ask to be directed where the real estate records and Grantor/Grantee indexes are. Then search for her name. If you can get through then you might even be able to call the local tax collector and ask if there's something in her name. You may have to give them the story, but just to be sure.
Bizwiz has given you the best advice. You really need to nail down how much was there, how much was withdrawn, and when the withdrawals were made. You should be able to get someone to help recreate the stocks or funds where the investments were and figure out about how much should have been there. When the money was taken, all the future interest was lost, too. Sounds like grand larceny to me. I hope C is also prepared to be estranged from her grandparents, at least for a while.
One other "note"..the broker This whole situation sounds a bit funny to me...so keep an open mind and trust no one. I would also look into this broker, as he may have some responsibility also. His declarations that the "statements are not available", and the withdrawal activity, leave me wondering. I would look into HIS activity on this account. Remember, he makes money for many transactions (if he sold investments to liquidate them into cash for withdrawals). And, he may be liable for some restitution if found to have guilt... Just be diligent and prudent in this mess, do not assume anything. I don't know what area of the country you are in, but a call, or visit, to your local FINRA office would pay benefits. They will tell you the regulations, and how things should be done. They can also tell "C" about any violations history with this broker and/or firm. I hope "C" also takes the imediate steps to remove her mother's name from this trust in full. Take all prudent steps at this point. Let us know what the credit reports say when you get them, and we'll move forward from there.
P.S. Is this a "large" or "small" brokerage house? Quick question: Is the brokerahe house that has this account "large" or "small"? I mean is this a recognized name of a national firm, or a smaller local firm with only 1 or 2 offices? There is a reason I ask, look at your statements, and see who actually "holds" the account.
Hey, if there is a mortgage in your name, check it's value. If it has equity, sell it and use the money to right the debts. it's your house, ain't it? All the paperwork says so... A few nights in the homeless shelter would give Mom a little perspective on things.
Sounds like "Mom" is sharp enough to put the "deed" in her own name, and the mortgage in "C"'s! But, you're right, check it out!
A possibility. But I'm not sure that the mortgage company would have allowed that without some sort of signed and notarized release from the trust. But if Mom, as trustee, did that, which she could, she would be wide open to a charge of breach of fiduciary trust, She would need plenty of rationale -- all documented -- to back up her transfer. I am reasonably sure that that sort of document would have been filed along with mortgage papers as part of the closing on the property. Another place to look.
It depends, a trustee sometimes has no authority to withdraw, or transfer funds. They only have power to exercise investment decisions, and file papers, etc., or disburse for "emergencies". However, I'm betting there were stipulations in this trust for withdrawals before the 21st birthday. This is often to cover "providing" for the beneficiary. Usually this means school, college expenses, ans so on. Most times the trustee is a "professional" that you can "trust". I will be interested to see how the trust was set up in this scenario. I'm positive this one will be a mess, and the makings of a good soap opera.
I bet she's going to say the proceeds were used for C's benefit. If the house is the one she and C lived in, there can be a case made that the funds were used for C's benefit. But since C was a minor, of course the house would be in Mom's name. Not sure how she pulled off getting a mortgage in the minor's name. Of course, if she had to put both names on the deed, C may be able to force the sale through a court order, much like what happens in some divorces where sales are forced. She might want to go to the courthouse and check the deed for the house.
This is where the plot thickens! IF, "C"'s Mom purchased a house for "providing" for "C", THEN.. a decent financial advisor (brokerage house) would have advised to put the real estate in the trust's name (for many reasons). "C" needs to get copies of "Mom's" credit reports also, I'm not sure how she'd do this, but she needs that information for a complete picture.
That may have to come under a court order when some of the legal actions start taking place. I would think the prosecutor could get copies of the credit reports. It's illegal for C to do it, and she really needs to hold to the high ground now.
Reading back through this thread, I sense that there is a soap opera quality to it that is disturbing. The more that gets pointed out, the more sordid the whole situation seems to be. Poor "C" is caught in something of a nightmare, as much because she lacks the tools to resolve the issues as the issues themselves. One thing is quite evident, at least to me, "C" isn't even close to knowing what has happened and where things stand now, let alone what to do next. "C" might be well advised to hire an attorney to work with her in digging through this pile and in getting her the various legal authorizations needed to start getting the straight answers. Once she has the answers, she can make an informed choice as to what to do.
As horrible this whole situation is, oracle, you're right. This could be a story to be sold to Hollywood. Poor 'C' being mistreated by the bad mother, Her grandparents are on the mother's side, the 'bad' securities company may have worked in collusion with the mother, as they would have made profit from any trade. Then 'C' wakes up, takes controll with the help of her Mother-in-law and together they approach Creditnet, who helps her getting back on top and punishing the 'bad' people. Not trying to make fun of C or the situation, just looking for a little laugh in a bad situation.
