It took several weeks, but the AE finally found the account at the
mutual fund, under Hutton & Co.'s name, closed it, and turned the
proceeds over to Broyhill's lawyer. What's really funny, or scary, is
when the AE found the account at the mutual fund, it was one of three in
Hutton & Co.'s name with no indication of what customer they belonged
to, and he just left the other two sitting there.
3: Paragraph 40 Mr. & Mrs. Burchard were a retired couple in about
their 80s, each of whom had a trust, and most of the assets in the
trusts were shares in a bank (I think it was in Illinois, but it might
have been somewhere else in the Midwest) that Mrs. Burchard's father had
founded and Mr. Burchard had been president of. They had retired to
Arizona, and an AE in Hutton's Mesa office talked them into moving their
trusts to Hutton Trust so he could sell the stock and use the proceeds
to buy them some annuities from Hutton Life Insurance; the commissions
AEs got for selling Hutton insurance were even higher than their
brokerage commissions. By the time I found out about the trusts, the AE
had already sold the stock, and when I told him annuities were an
improper investment for the Burchards, he told me not to worry -- the
insurance company wouldn't issue annuities on people their age, so he
was going to sell them annuities on their son's life, and when they died
the son would inherit and sell the policies and invest in something
else, and the AE would collect a commission on each transaction! That
struck me as an archetypical example of "churning" an account, which
means repeatedly liquidating investments and reinvesting the assets to
collect commissions on the new investments.
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