Gloria Ferris

one woman’s view from a place by the zoo in the city

Archive for January, 2014

What Do Fishing, Blogging, and Relationships have in Common?

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When I stumbled on Robert Pearce’s recent blog post that referenced Capital Financial Group, it was hard for me to recognize the men and women that I have come to know over the years. Mr. Pearce’s broad stroke of the pen does the financial services and his profession a disservice.

In striving for his intent to raise fear, uncertainty and doubt in his readers, he has done a disservice not only to an independent producers’ brokerage but also to the dedicated men and women who have forged a relationship that works for them as well as their clients.

You see, I have met many of the people he supposedly describes in his article. You do not know me, just as many of you do not know Mr. Pearce, but I ask you to trust my statement that I didn’t meet people like the ones he describes.

Over the years, I have met a dedicated group of people who strive for professional knowledge by learning how to ask hard questions of people who are supposed to have the answers, all the time knowing that there are no crystal balls. I have participated in group discussions led by their peers. They do not take their obligation to themselves and their clients lightly.

I have interacted socially with their wives and husbands. There are those to  whom I nod in a crowded room and there are others that I can’t wait to see again. When you interact with a group of people in a professional setting, and then later, break bread with them socially, you get a feeling about who those people are, what you have in common, and how you relate to each other.

I have come to know this company, their registered reps through themselves and their spouses and I don’t recognize the people Mr. Pearce describes. In any profession there are those who are better at what they do than others, there are the technical and analytical ones, there are the ones who are listeners, and the ones who map out a plan and help you stick to it; very seldom, are they like Mr. Pearce’s description. If yours is, by all means, consult someone who can help you, but do not succumb to fear, uncertainty and doubt.

Trust is a key in any relationship and whether you are choosing a financial advisor, an attorney, a friend, or a spouse, it should be at the top of your list of criteria. Through the years, you choose trusted advisors to guide you on your way. Chances are your trust is not misplaced.

I am a blogger. I read blogs. I post things to the internet. Would I choose a trusted advisor from what I read on the internet? No. Would I want someone to choose me as a trusted advisor based on what they found on the internet? No. Some things are still better done face to face. Trust is still a key component of good relationships whether they are professional or personal.

My father was one of my trusted advisors. Now, his sage advice only remains in my memory. He was an avid fisherman, preparing for each trip with anticipation. Sometimes, he would come home with a bucket filled with fish; other times there would not be many at all. I couldn’t understand his fascination with a sport that could yield so much or so little.

He said, “Cat, ask yourself this question: Would you rather catch a fish like Ernest Hemingway’s Nick Adams in a swift river, or a pond stocked with hungry fish fighting for food?

I know my answer. What’s yours?

Oh. Here is Robert Wayne Pearce’s posting from this past June:

By Robert W. Pearce of Law Offices of Robert Wayne Pearce, P.A. posted in Capital Financial Group on Saturday, June 1, 2013.

Capital Financial Group Inc./H. Beck, Inc. (Capital Financial) is an independent broker-dealer headquartered in Bethesda, Maryland and reportedly has over 1000 registered representatives across the United States operating in one or two person offices. Its branch offices are largely comprised of small producers earning commissions at higher pay out rates than the major full-service brokerage firms, a recipe for disaster when it comes to protecting investors from churning and unsuitable investments and unsuitable investment strategies!

Churning is a violation of Federal and state securities statutes, industry rules and regulations and a breach of fiduciary duty to investors under common law. Churning can occur if a Capital Financial broker exercises control over the investment decisions in your account and purchases stocks or recommends that you purchase and sell stocks for his benefit, i.e., commissions not yours! These trades rarely, if ever, make the investor any money. In fact, the additional commissions raise the break-even point for the investor to the level where the stock must perform at an extremely high level in order for the investor to make any money.

In every broker-investor relationship, the broker must assess what the investor’s goals are as well as his or her risk tolerance. This assessment is based on a number of key factors, including the investor’s stated objectives, risk tolerance, financial condition and tax status. It is the broker’s responsibility to only pursue investments suitable for that investor based on these factors. A stockbroker is obligated to only recommend suitable investments and investment strategies. If a Capital Financial broker recommends unsuitable investments and unsuitable investment strategies, it can leave you vulnerable to unnecessary risk and losses.

Independent broker-dealers are notorious for their lax supervisory practices and procedures. The business model of these operations is to open many offices nationwide for steady growth of fixed monthly revenues without the costs attendant to a full-service branch office with on-site manager, compliance officer and operation personnel. The registered representatives of these independent broker-dealers generally operate as separately incorporated businesses. They are not employees of the broker-dealer and therefore not controlled in the same manner as full-service brokerage firm representatives. The registered representatives control their structure and costs to maximize profits and often leave the protection of investors’ rights and interests as their lowest priority.

The typical supervisory organization of independent broker-dealer operations is to have other independent contractors operate Offices of Supervisory Jurisdiction (OSJs) to monitor the registered representatives from geographically remote offices and then report to the main franchisor’s compliance office at national headquarters. The supervisors at the OSJs are not employees of the franchisor and often run their own brokerage, insurance and other businesses. They are not devoted full-time supervisors of the smaller branch offices. Consequently, OSJ managers cannot and do not supervise the day-to-day operations of the registered representatives of these Independent broker-dealers.

There is no immediate review of new accounts opened, securities transactions, business records, cash or securities receipts and deliveries, correspondence and business activities unrelated to the securities brokerage operation at these independent brokerage firms. The lax supervision leaves investors who have transferred their accounts to the smaller independent broker-dealer vulnerable to excessive purchases and sales of securities and securities that have not been reviewed or authorized by anyone other than the sales representative earning a commission. Generally, no manager is onsite to detect the placement of inaccurate information about a client’s investment objectives and financial condition to document the suitability of a particular investment recommendation. There is no daily review of sales literature and client correspondence to protect against misrepresentations and misleading statements being made to investors. In fact, there may be only one compliance audit visit per year at many of these offices. These Independent brokerage business operations are worrisome to the North American Securities Administrators Association (NASAA), which has documented more instances of sales abuse and consequently investor losses at these firms.

Have you suffered losses in your Capital Financial brokerage account? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against Capital Financial stockbrokers who engaged in churning, recommended unsuitable investments and unsuitable investment strategies that caused investors losses.

The most important of investors’ rights is the right to be informed! This Investors’ Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors’ rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889 FREE, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.

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Capital Financial Investor Alert – Watch Out For Churning and Unsuitable Investments! | US and International Securities, Commodities and Investment Dispute Law Firm | Law Offices of Robert Wayne Pearce, Boca Raton FL

Written by Gloria Ferris

January 31st, 2014 at 1:51 pm

Tim Ferris: putting wiring and cabling underground

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Our meeting tonight, January 9, 2014, about the proposed utility work on Denison needs to address things that have been discussed here and legislated here for over 100 years. See this piece from 2007:

Saturday, June 23, 2007

putting wiring and cabling underground

FindLaw for Legal Professionals – Case Law, Federal and State Resources, Forms, and Code — Since prior to the First World War, in the times of Mayor Newton D. Baker, the City of Cleveland has had fairly intelligent ordinances on the books for the discreet handling of public utilities. This link speaks to electrical wires, and the same ideas should apply to telephone wires and fiber optical cable, and refrigerator-sized boxes on treelawns. I’d say that now we have SB117 rolling towards us, we need to revisit why it’s in the public interest to put utilities underground, out of the way, out of sight, out of mind, and secure against compromise by terrorists and nasty weather, and the occasional careening automobile.
Let’s start talking about making the utilities invisible. We’ve had the idea for about 100 years and, like the 1903 “Burnham and Root” plan, The Group Plan, we still haven’t fully executed it. That says something about our community, and about us.
We need to make sure the interests of the public are served first, and those of the utilities are served someplace after that. I wouldn’t want to build a business in a city where my lifeline, my electrical and fiber optic cable hookups, were exposed to as much risk as they are in Cleveland. Cities with thriving commerce like Dublin, Shanghai, London, and Paris realized this long ago; business goes where it’s generally welcome.
Here’s a writer’s recounting of the wireless renovation of Brugge that paid dividends, once it created community capital. Like Cleveland, Brugge was at one time one of the richest cities in the world:

The city fell on hard times and became such a backwater that neither side bothered to bomb it during the war. The place was poor for a long while, and only began to recover during the 70’s.

 

But then Brugge found that History had dealt it the same kind of weird backhanded favor it did when it made Ireland too poor to put chemical fertilizers on its fields and pastures (for which reason its grass-fed beef is now famous all over Europe, and its organic produce
is becoming that way). Brugge had been ignored… and hence all the great old buildings of its medieval inner city had been perfectly preserved.

The city began renovating itself and (in a very smart move) putting all its utilities underground. Phone, electric, cable, fiber, everything went under the paving stones. Satellite dishes are not permitted to be visible on the outsides of buildings: everybody in town has affordable thousand-channel cable and broadband, and if you want something more exotic, as long as you can hide the hardware from the tourists, you’re fine.

As a result, you can walk through the Markt and all the streets around it and see nothing that reminds you of this century…except the things inside the shop windows. A big problem, there, for this is one of the great shopping towns of northern Europe.

Posted by Tim Ferris at 6/23/2007 10:03:00 AM

Labels: undergound utilities, urban planning

Tim Ferris: putting wiring and cabling underground

Written by Gloria Ferris

January 9th, 2014 at 11:37 am