Fraud is fraud - regardless of "fiduciary duty"

Aug 25, 2018

  1. DHK
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    DHK "YOU CAN'T HANDLE THE TRUTH!"

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    Brokers, advisers and insurance agents implicated in alleged $100 million investment fraud

    You read about **** like this and you wonder why there was all this push for insurance agents to become investment advisers, or make annuities regulated... when there are so many other fully licensed advisers who fall for **** like this.

    More regulations don't fix **** like this. Fraud is fraud, regardless of whether you're under a suitability or fiduciary standard of care.
     
    DHK, Aug 25, 2018
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  2. IsaacA
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    IsaacA Expert

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    You right.
    What would you think we can do to help?
    It’s such a shame. Puts a stain on our industry.
     
    IsaacA, Aug 25, 2018
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  3. Tim Resnick
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    Tim Resnick Super Genius

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    So much for licensing and common sense. These guys 'with their Fancy Licenses' were selling a Ponzi Scheme (guess they saw some good commission dollars).

    What kinda commissions they were paying?

    ?
     
  4. DHK
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    DHK "YOU CAN'T HANDLE THE TRUTH!"

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    My biggest recommendation would be to not sell anything that your insurance license and your E&O doesn't cover. These kinds of "private placement" deals SEEM to end up being such a gamble.

    I would stick to well established and well rated insurance companies and their products.

    The only thing I ever want to "apologize" for... is if the underlying index was negative, and so the policy had a zero return for the year (minus any IUL policy cost of insurance fees).
     
    DHK, Aug 25, 2018
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  5. Tim Resnick
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    Tim Resnick Super Genius

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    I wonder what kinda disclosures they had the buyers sign?

    Always 2 sides to the story.

    Are you saying their E/O doesn't cover private placements?

    I've seen these private placement deals advertised quite often in my area. Security Firms are always pitching them...
     
  6. DHK
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    DHK "YOU CAN'T HANDLE THE TRUTH!"

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    It may... for investment advisors and/or registered reps. But then, the broker/dealer and/or RIA firm may also be "on the hook" if it was approved.

    I highly doubt it would be covered for insurance agents.
     
    DHK, Aug 25, 2018
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  7. DHK
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    DHK "YOU CAN'T HANDLE THE TRUTH!"

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    The article says that intermediaries were paying commissions in the areas of 6-10%.
     
    DHK, Aug 25, 2018
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  8. IsaacA
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    IsaacA Expert

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    Do they all plan something like this out. Or does it kind of just happen?
     
    IsaacA, Aug 25, 2018
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  9. HealthGuy
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    IsaacA if you think that all of those on the street selling this (as the downline) knew what was going on - that is wishful thinking...advisors, insurance agents, marketing groups all get caught up in this type of activity from time to time...to say that they knew it was going on would be presumptuous.
     
  10. Stephen
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    Stephen Guru

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    There was a group here in Arkansas that got in trouble for running a similar scheme, I think that one of them was a forum member for a short amount of time.

    Buying income streams that come from pension payments usually fall apart when the original pensioners discover that they can keep the lump sum and then also divert the pension payments back to themselves instead of the person that they sold the payments to.

    The pension fund is going to send the money to whatever account that the pension owner tells them to , and then it becomes a civil issue. After it becomes a civil issue the investor that bought the pension payments as an investment learns that it isn't the original pensioner that they need to be litigating. It's a very ugly deal.
     
    Stephen, Aug 27, 2018
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