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Author: Hawkwin Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 81636  
Subject: Re: Too many thinly traded stocks - broker abuse Date: 12/7/2007 2:07 PM
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The broker would have been required to keep written documention of discretionary trading authority.

Without such, the broker could be and should be legally liable for those trades.

The executor should easily be able to request a copy of that authorization by verbal or written request.

Orders that were called in would have to be marked unsolicited. In many cases, such trades for a 84 yr old would trigger a "principle review" by someone higher up in the food chain if they were actively trading.

I know in one of my accounts were the lady is in her 80s and with 300K in 100% stock, I got an inquiry on that even though I am not the one that sold her the stock (it was previously in certificate form). My Principal wanted to know why I had a client with so much stock at that age. We hadn't done a single trade but it still triggered an inquiry.

This means that even if your relative was calling in those trades on his own, the broker might have had some responsbility to advice him otherwise to diversify.
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