Ripped off by Raymond james

[LivingAlmostLarge]

I am starting to peel back the onion. I am starting to figure out where my parents went. Scallywag I couldn't finish that Raymond James, but I found out my parents "carried" a margain loan since 2012 to 2019 at 5%. $50k. My mom has that in her checking. NO WAY my parents would ever have carried a loan. NO absolutely not. My mom paid off the mortgages back in early 2000. Cash for cars. My mom has trouble having less than 6 figures cash.

They also had tons of churn of buying and sell 1 share. I don't know what to do. I am so frustrated. I am ready to beg my parents to allow me to move stuff over. I can't do it anymore. It's not 22 funds it more like 65 stocks. A lot before they lost money and underperformed since 2012 the market VTI/VOO index. BY A LOT. Not even a little.

I don't even know what to say besides wanting to cry.

[bjl584]

If you have a legit case, then you can get an attorney who deals in the world of finances to take a look.
But, you would need your parent's consent or control over the portfolio

This sounds like a knot that you won't be able to untangle without professional help.

[Scallywag]

I am starting to peel back the onion. I am starting to figure out where my parents went. Scallywag I couldn't finish that Raymond James, but I found out my parents "carried" a margain loan since 2012 to 2019 at 5%. $50k. My mom has that in her checking. NO WAY my parents would ever have carried a loan. NO absolutely not. My mom paid off the mortgages back in early 2000. Cash for cars. My mom has trouble having less than 6 figures cash.

They also had tons of churn of buying and sell 1 share. I don't know what to do. I am so frustrated. I am ready to beg my parents to allow me to move stuff over. I can't do it anymore. It's not 22 funds it more like 65 stocks. A lot before they lost money and underperformed since 2012 the market VTI/VOO index. BY A LOT. Not even a little.

I don't even know what to say besides wanting to cry.

You are going to navigate this very carefully. This "advisor" was picked by your parents merely because he was from their hometown and "from a good family", correct?

You would need a signed POA to handle this. If what you say is accurate - including repeated buying & selling of single shares of 65 different stocks! - then you will also need an attorney, esp if there's a loan there that your parents did not take out.

I suggest you sit your parents down and show them what has happened. If you have siblings, you may need to all sit down together and have a conversation. Demand a full copy of their file IN WRITING from both the advisor and Raymond James, including tax records (yes, they probably paid plenty of taxes on the a/c "churning"). You need to review ALL the paperwork in their possession and ANY paperwork they may have signed, first. Go through everything with a toothcomb, and run it by a 3rd party accountant, a tax professional AND a lawyer.

i AM NOT a lawyer and this is not legal advice. If your communication with the professionals confirms that your parents are victims of fraud, then you and your siblings may need to convince them to press charges against the "advisor" for criminal breach of duty and fraud.

But first you need to get POA over their
affairs. Without that, you cannot do a thing. You should first tell them about the loan on which they're paying interest, and the single share churning and then let them decide to consult a lawyer / press charges or not, if they won't give you POA.

IF they decide they don't want to press charges against their "home boy", then they should send an email with a cc to you, and a cc to his supervisor, asking for their a/c to be rolled over to Vanguard or Fidelity or whoever you trust immediately at no cost to you

I'm so sorry this happened to your family. One more reason I'll stick to VOO & VTI. These financial "advisors" are just leeches for the most part.

[Like2Plan]

https://www.sec.gov/litigation/admin/2019/33-10689.pdf

Raymond James Agrees to Pay $15 Million for Improperly Charging Retail Investors

https://www.sec.gov/news/press-release/2019-178

I’m by no means an expert on this, it it seems like a complaint with the SEC might be in order.

https://www.sec.gov/oiea/Complaint.html

Based on what you’ve said— inappropriate margin loan and stock churning sounds like complaint worthy. Would you classify your parents as savvy investors or not? It sounds like they may be taken advantage of.

But, as mentioned upthread - You might be the one that draws your parents ire because there might be a social relationship with the advisor and your parents might be embarrassed about making waves..,, But, maybe if you showed your parents the complaint linked above—

[TexasHusker]

First of all, I am sorry for this. I hear of these things all too often. Merrill Lynch basically stole $1.5 million from my stepdad, who was beginning to suffer from dementia, and place him in some horrible annuities. My stepdad thought of him as a "friend", and when I called him and told him what I knew, he immediately called my stepdad and complained to him. Guess who was the bad guy?

You do have to have Power of Attorney to pursue the matter, but quite honestly $50K is such a small amount in the scheme of things, you won't come out on this. Fighting these things is very, very expensive. And these guys are pretty slick at covering their bases. Demonstrating malfeasance is a very high bar to reach.

[Scallywag]

You do have to have Power of Attorney to pursue the matter, but quite honestly $50K is such a small amount in the scheme of things, you won't come out on this. Fighting these things is very, very expensive. And these guys are pretty slick at covering their bases. Demonstrating malfeasance is a very high bar to reach.

I wonder if the parents signed a loan document - with or without realising what they were doing? If it was someone that they instinctively trusted for any reason, it could have been easy for the "advisor" to slip in loan paperwork without the parents not realizing it and signing it without actually reviewing it.

OP will never know the full extent of the rip off without getting her hands on all the records from all the way back from 2012 and then running them by both an accountant and a tax professional.

Regardless of the amount involved, this is egregious and a fraud, plain & simple, UNLESS the parents signed up willingly to take on this loan. Her parents may decline to press charges, but he absolutely needs do be reported at least to his employer (regardless of whether RJ takes action against him or not).

[TexasHusker]

I wonder if the parents signed a loan document - with or without realising what they were doing? If it was someone that they instinctively trusted for any reason, it could have been easy for the "advisor" to slip in loan paperwork without the parents not realizing it and signing it without actually reviewing it.

OP will never know the full extent of the rip off without getting her hands on all the records from all the way back from 2012 and then running them by both an accountant and a tax professional.

Regardless of the amount involved, this is egregious and a fraud, plain & simple, UNLESS the parents signed up willingly to take on this loan. Her parents may decline to press charges, but he absolutely needs do be reported at least to his employer (regardless of whether RJ takes action against him or not).

this goes on ALL the time. It's actually the norm. So much so, I would be surprised to hear of a broker/advisor that is actually doing a good job for their clients.

Think about the paradox for a minute: Who is seeking a financial advisor? Someone who doesn't feel confident about money matters. You have fertile ground for abuse right off the bat. It's usually a bad situation.

[Scallywag]

this goes on ALL the time. It's actually the norm. So much so, I would be surprised to hear of a broker/advisor that is actually doing a good job for their clients.

Think about the paradox for a minute: Who is seeking a financial advisor? Someone who doesn't feel confident about money matters. You have fertile ground for abuse right off the bat. It's usually a bad situation.

Well, crime happens. That is why I've become jaded and determined to make my own decisions when it comes to my family's investments.

After reading the Boglehead book and reading their WIKI, I'm now convinced that the 3-fund portfolio is the best deal out there if you're not greedy and happy with market returns (which I wasn't ok with until very recently myself). There would only be minimal a/c churning with the 3-fund portfolio and so no commissions generated due to "active investing" and the resulting rip-offs LAL mentions in her OP.

He traded ONE share each of 65 stocks MERELY to generate commissions! It's INFURIATING to think of how much he ate in just trading commissions he generated for his employer and for himself. Think also of the tax liability he created for these people! And then he signs them up for a LOAN at 5% interest? All the while UNDERPERFORMING VOO & VTI over 9 FREAKING years? Really?

Where I feel even more bad for LAL's parents is that they likely trusted this SOB because they thought they "knew" him - he was likely "one of us" to them. I can't even begin to imagine what an enormous betrayal this is and what a bottom feeding pond scum thug you have to be to backstab people who trusted you and gave you a chance simply because you were their "homie".

But I bet they would never press charges, unless LAL and her siblings insist or take matters into their own hands. I know I could personally never file a criminal complaint against anyone I grew up with or have known for decades - that's the sad thing here. He knew they wouldn't take action and likely took advantage of that to rip them off.

This actually happens in immigrant communities routinely so it shouldn't be any surprise that it happens among non-immigrants, too.

A pox on him and may maggots infest his sores.

[TexasHusker]

Well, crime happens. That is why I've become jaded and determined to make my own decisions when it comes to my family's investments. After reading the Boglehead book and reading their WIKI, I'm now convinced that the 3-fund portfolio is the best deal out there if you're not greedy and happy with market returns (which I wasn't ok with until very recently myself).

Where I feel even more bad for LAL's parents is that this was a man they likely trusted because they thought they "knew" him - he was likely "one of us" to them. I can't even begin to imagine what an enormous betrayal this is and what a bottom feeding pond scum thug you have to be to backstab people who trusted you and gave you a chance simply because you were their "homie".

But I bet they would never press charges, unless LAL and her siblings insist or take matters into their own hands. I know I could personally never file a criminal complaint against anyone I grew up with or have known for decades - that's the sad thing here. He knew they wouldn't take action and likely took advantage of that to rip them off. A pox on him and may maggots infest his sores.

This actually happens in immigrant communities routinely so it shouldn't be any surprise that it happens among non-immigrants, too.

It is extremely difficult to get anything legal to stick against a financial advisor. It has to rise to the level of gross malfeasance, at that's a very tough nut to crack open.

I wouldn't even trust my investments with anyone besides myself. No one cares about them like I do. For me, it's my nest egg and livelihood. To a FA, it's just another account to leech off of.

[LivingAlmostLarge]

It is extremely difficult to get anything legal to stick against a financial advisor. It has to rise to the level of gross malfeasance, at that's a very tough nut to crack open.

I wouldn't even trust my investments with anyone besides myself. No one cares about them like I do. For me, it's my nest egg and livelihood. To a FA, it's just another account to leech off of.

It is very difficult to prove malfeasance or stupidity. I mean it's stupid but my parents were stupid.