mazlack@ernie.berkeley.edu.BERKELEY.EDU (Lawrence J. &) (03/03/86)
A little while ago, we had a discussion about whether or not you should
leave your stock certificates with your broker and the relative protection
of the insurance.
Something related to this was reported in WSJ last week. It seems that
this guy had a broker who took him for $50 million dollars. The broker
worked for Merril and then E.F. Hutton. For the details, read the WSJ.
(Note: there was a little bit of computer assistance here - the broker
used his own micro to generate statements for the customer - somehow,
he sent Merril's and Hutton's actual statements to his own address.)
The kicker here is that the customer wants his money back - and neither
Merril or Hutton are about to oblige.
The customer messed up in three ways:
(1) he gave the broker discretionary power
(2) he never verified what he owned
The way to avoid this is to inventory your own certificates.
....Larry Mazlack
mazlack@ernie.berkeley.edu