Be very conscious that the Brokerage may see that they have a lot of exposure here, and they may continue to stonewall to protect their options. Pleasant but relentless is a good way of approaching the conversation. Be careful that you don't say anything that they could construe as your letting them off the hook. Reading between the lines, there may be a chance of recovering some of the $$$ but it is likely to get messy. If over $500K in compounded assets have been siphoned off in unauthorized way, someone's Errors and Ommissions insurance chould be on the hook. The thought of putting the licenses on the line may encourage a reasonable negotiation. But they need to be the ones that blink, not you.
Good advice, remember that this brokerage firm does have a hand in this. If the original $100K had been invested "prudently", "C" would be looking at a trust anywhere between $500K-$900K. I'm certain this was the intention of the trust. So, understand that this brokerage firm is not going to "rush" to help you. They're scrambling trying to reconstruct history now, and figure out the resulting exposure they have. You will have to be persistent with them, and nail everything down as to timeframes, contact person, etc. A quick look at the numbers given, $100K invested 22 years ago, now with a balance of $30K, there's evidence of improper handling. The brokerage firm will be nervous as you stated they're "national and large" hence they have "deep pockets", and that is always a primary target in a suit. Brokerage firms do have insurance for these things. My bet is if you start pushing them, they'll be making a settlement offer somewhere. Hence, don't play this card until you really need it. In other words, don't use this threat to only get the account information. You're going to have to play some poker here, time for the game faces. Be cool and calm, I am positive this "Ops Mgr" is sweating bullets over this, especially if any of it happened on "her watch". She will get nailed for "failure to supervise", which can be a hefty fine, say $25K-$50K or sometimes much more. And this is "her", not the firm, the money comes straight out of her pocket! P.S. Have you received the credit reports yet?
The fact that they're big and national means they want this kept off the front page of the Wall Street Journal. As Bizwiz said, save the big stuff like insurance and going to the newspapers for later. Not only do they have problems with the securities regulations side, assuming that they are publicly traded, they have SEC problems as well (like Sarbanes-Oxley internal controls compliance). Even though these laws are only a few years old, proper internal controls should have found some of this. Play it cool for now. There is plenty of time to play the strong cards later.
Playing it cool may make the pressure on them unbearable and lead to a better result. Just don't let them baffle you with bullshit. If you don't understand what they are saying, say: "I'm sorry, but I don't understand what you are saying. Could you say that again?" Polite, even cordial, but relentless. It is your money, not theirs. They work for you, not the other way around.
Bizwiz, no, I don't mean for them to play dumb, but rather to play smart. For 'C' to let the company know, that she's figured it out that they've done wrong. That she knows that she has options to report them to all kinds of entities, which could create major, major problem for them. (this may not be the only case, who knows?). So, that they would be sweating bullets to keep her from doing that and offer to negotiate. Once she's made the reports, they won't be as willing to do anything about it, because it's out of her hands.
The trick is to keep them from clamming up. I think that is what bizwiz is concerned about. I agree with his assessment. Guns later, especially the big ones. Let their fears and foibles work against them, all the while maintaining a polite and cordial demeanor in dealing with them. By the time they get to the conversation, they will have a very good idea as to the difficulties they face. Let the requests for relevant information drill into them that you are serious and unwilling to settle for dissembling on their part.
Exactly, as the thing is, the brokerage firm KNOWS what they've done wrong, they don't know if "C", or her Mother In Law know it! Play to their "unknowns", and let them sweat amongst themselves for a while. In short, "do a Columbo" on them!
Absolutely. Don't let them know what you know. Don't let them know that you know all of the places to report them. As they say in poker, you've got to know when to hold 'em. Right now you're holding all the cards. Don't show your hand yet.
You guys are TERRIFIC!!!! Okay . . . Love your suggestions - thanks to EVERYONE . . . Yes, I can play it very cool. Part of my job involves contract negotiations. However, I know the parameters of what I am dealing with in my field of expertise - but I am truly ignorant about investment firms, UTMA/UGMA, trust funds, etc. DH and I are 401-K people, not stock investors. Our only stocks have been DRIP investments. Believe me, I needed to hear your advice on how to play this, as my feeling (and I think I speak for C, too) is that "time is of the essence" and the longer we sit still, the more time we are giving the brokerage to doctor docs and try to pull a fast one. However, you have all enlightened me and I see things very differently now. This situation has been gathering momentum over 20 years. So no way to untangle it quickly . . . and no reason to rush . . . better to take measured steps and see how things unfold. And I am reading as much as possible - daily. Once we get this all put together . . . we can ruminate over the history . . . see how the principal got eaten into (and when). I was trying to explain to C. that it would be like doing "forensic accounting" - we can establish a time line - and match that up w/ the disbursements - and figure out what was going on in her mother's life at the time - as in - put in new pool, bought a new car, took expensive vacation, etc. It will be difficult but it can be done - at least some things will become fairly obvious. There is absolutely no doubt in my mind - and in C's as well- that "her money" has been bolstering Mommie Dearest's lifestyle for quite some time - and the g/parents turned a blind eye to it b/c they felt bad that they could not underwrite their daughter's lifestyle. Step-dad lost his job in the last few years . . . and amazingly, life just went on . . . so you can bet on it that C's fund was heavily dipped into . . . and that would be after her 18th b/day. Also, have been reading on FINRA, SEC, and Sec of State for NC - websites. Once we get the trust instrument, we can determine whether or not C should have gotten this handed to her at 18 or 21. I thought things would be very cut and dried but after reading on some law sites . . . seems in some states, unless the administrator chooses to turn over the account, it is not necessarily automatically turned over at age of majority. If that trust was established in 1985, the chances are good it should have been turned over to her at 18, if I am reading the regs correctly. I have a feeling we are going to get the minimal - and in dribbles - from the brokerage. I just know they are NOT going to give us copies of the original trust instrument - not at first, anyway. Of course, I could be wrong. C got copies of her CR from 2 agencies - waiting on the third. She could not answer the security questions correctly for that one so they would not let her get that one online. We have uncovered 2 accounts that she did not set up so far. Once we get the last one (TU) we can compare and figure out what to do from there w/ addressing the mystery accounts. And yes, there were hard pulls from financing institutions wh/ is quite puzzling. But so far no mortgage actually showing up. Could mother have just listed C's account as part of her assets on a mortgage application??? Mother and s/dad have been involved in several property transactions in the last three years. Okay . . . won't keep babbling . . .thank ALL OF YOU again for continuing to encourage us, give us sound advice, and help us sort through a very daunting and confusing situation.
A couple of thoughts. If C knows, or can find out, who actually drew up the trust, he or she should have a copy. There may have been a copy filed with the courthouse, although I know of no requirement to do so. But you can file public documents. Many veterans file a copy of their DD214 just so it is a public record somewhere. I believe that UGMA falls under federal law, so I'm not sure the state could change the date on when she gets the money. But you would need to know if the entire trust was an UGMA, or if the trust was funded with assets other than the stocks, and the UGMA was only part of the trust. If so, the status of the other assets would need to be determined, too. Here's another card to keep in your hip pocket, it may not need to be played. If there were earnings on the funds, taxes should have been paid. See if the trust (or even the laws governing UGMAs) specify anything about taxes. Since Mommy was the trustee, I think she would have been responsible for filing the taxes. I'm thinking if Mommy Dearest took money out and never paid taxes, she could be in heap big trouble with the IRS. Remember that many criminals cannot be brought up on other criminal charges, but they are brought to trial for tax evasion. Not something you need to be using yet, but something to think about as you gather documents.
Nothing about this is easy, it seems . . . G/father is not being helpful. We are certain he not only knows how improperly this fund has been handled, when his business went "bust" - the whole family heard discussions about how G/father had tried, unsuccessfully, to raid C's trust fund to try to recoup some cash to bail himself out. DH and I also are very curious about tax returns and how earning were reported. We agree - the "Al Capone" strategy still works - IRS can get you on fraud or tax evasion . . . when no one else can do a thing . .
But as I said, save that for last. There is no time limit on fraud. Play the rest of it out, then call the IRS.
I have nothing to offer, just wanted to give my condolences to C for what she is having to go through. The thought of a parant doing such things to thier own child is just horrifying. I have 3 children and would never dream of doing such a thing to them. I hope everything works out well, I will be watching and hoping for good progress. Hugs, Tegleg
Thank you, Tegleg! Thank you, Tegleg! I really appreciate the support and C continues to remark to me how amazed she is at the genuine concern board members are showing her in this tough situation. Having to face that the person who should have protected her interests was too self-involved to do that - has been emotionally devastating. It has been empowering for C to feel she is taking control of her life. Our hope is that she can at least find some answers, put things in perspective, acknowledge that wrong-doing has occurred, but also . . . realize that human beings are fallible, don't always do the right thing . . . and we must not let ourselves be victimized by someone else's character flaws. Her mother is still her mother; I think we can forgive, even if we don't forget . . . but that doesn't mean the offender is not held responsible. Even if there are no legal recourses to "hold her mother responsible," I believe it will be liberating for C to have the facts, know what has transpired, and then verbalize "her truth" to her family . . . wh/ probably will only get justifications, denials and excuses - but as C has told me - "They will know I KNOW the truth" - and that, in itself, is empowering. Sending hugs back ((((Tegleg)))) - thank you! Ani
One thing, and I'm sure you've thought of it, but I'm bringing it up anyway: With 'C' wanting to forgive her mother, be alert, that they may try to use that. They might ask to find out how she would deal with her mother and if she admits to not wanting to do anything, they might exploit that weakness by implying that if she were to do anything against them, that they would come after her mother. Just keep that in mind and play hardball.....
I'd try to keep that out of the discussion altogether. If they ask something like how she feels about it or what she's going to do to her mother, she should just say something like "this discussion involves your breach of fiduciary responsibilities and your wrongdoing. My interaction with my mother in no way mitigates anything we are discussing." Don't even let them bring it into play.
good point, Hedwig, I just wanted to throw it out for them to be prepared for the question, because they will be looking for weakness and use it, if they find something.
