DO YOU HAVE A COMPLIANCE PROBLEM?
- A client calls (you don’t personally know them or can’t verify who it as, but they have enough information (acct #s, etc). Maybe it’s the client’s accountant, or the trustee of a trust.
They want to change their address of record to a P.O. Box
WHAT DO YOU DO?
- a) Change it
- b) Compliance will not allow you to have an account with a post office box as a mailing address, so you change it to your address.
- c) Tell the client you cannot do it. The account ACATs out 3 days later.
2. Suppose it’s a PO Box in the Cayman Islands?
- a) Ask the client for an actual address in the Cayman and move there.
- b) Same as 1, only worse.
- c) Say NO, change your phone number and wait for the ACATs to clear.
- A client you do know. (Somewhat new) calls and says they have been the victim of an identity theft. Account #s stolen, SS #, DL, etc.
a.) Give them Experian’s number
b).Check the account and find out it’s empty
- c) Collect all the information that was stolen and sell it to a data collection firm in Jersey City.
- You get a call from the spouse of a client with a joint account. She says they are having a domestic dispute and she wants to withdraw all the money. (Remember, it’s a joint account)
You….
- a) Send her the money
- b) Send her the money and give her your home phone number
- c) Call the husband and ask him how much it’s worth to save him a ton of money
- A client dies . What do you do with the account?
- a) Close it out. What good’s a dead client?
- b) Cry. It was your biggest client
- c) Sell the Lexis and buy a Yugo
- Then an adult child calls and says that there’s an estate dispute. The account you have is not an estate account. It’s still in the dead client’s name. Adult child said Daddy told he he wanted to leave all his money to her. You heard Daddy say this several times. But, she says Daddy left a handwritten note (signed) saying he was leaving everything to Dolly Wood of Two Mounds, Tenn. Nobody ever heard of her. AC says the stupid lawyer said there was nothing else he could do. AC wants her stolen money?
WHAT DO YOU DO?
- a) Call Dolly Wood and give her your home phone number.
- b) Cut a deal with AC to send her the money “because that’s what Daddy would want”. Don’t forget to give her your home phone number.
- c) Nothing. Let the buffalo chips fall closest to the buffalo
- You get a call from Bootleg Frankie, AC of Big Frankie your Jersey City, NJ client. BF says send Big money.
Bootleg is not on the account. Caller ID says “Unknown” and voice sounds like Pee Wee Herman.
You only have one leg left to break.
WHAT DO YOU DO?
- a) Send the money
- b) Send the money
- c) Send the money
- You get an email from a friend of a friend who says their sister in law is a Japanese citizen living in Japan and has a lot of money in a Bahamian bank that she wants to have invested in US securities. You think FinCen is a breath mint.
SO…
- a) Take the account. You need the money.
- b) Take the account, but put your address on it.
- c) Send the Japanese prospect your home phone number, and call Big to ask if he pays for
- You have a client who wants to be in the market. He has $7244. WHAT DO YOU DO?
- a) Nothing. You can’t make any money that way
- b) Send him to Scottrade
- c) Tell him to buy Powerball tickets.
- You get a call from the 82 year old mother of your former probation officer. She’s very excited. She got an official email notification from the assistant to the former finance minister of Lagos, Nigeria , and..she was selected as a good Christian lady as the beneficiary of a $5 million (US) fund for good Christian ladies. She sent them all her contact info, social security and everything they wanted, but has to wire them $817 for processing and wiring her the money. She wants to open an account for the coming $5 mil and wants you to wire $817 from her personal account right away. YOU….
- a) Tell her you have a better deal in Bolivian emerald futures
- b) Wire the assistant finance minister in Lagos the money and send him your information, in case. 82 year old mom doesn’t make it.
- c) Send the money. Start composing a letter for your firm’s clients: “MY Beloved Beneficiary….”
- Bootleg Frankie again. He says Big has a company. New Jersey Disposal, Inc. that he wants to take public. Big wants to offer shares at $.99 and then actively promote it with a constant contact campaign to everyone in Ohio, Indiana, Iowa, Arkansas and Mississippi with an announcement that NJDI has accidentally discovered a new drug to cure for cancer from the hypodermic needles washed up on the Jersey shore, and is guaranteed to go to $100 in a week. He wants you to be the market maker for the unregistered security. You still have that leg intact, SO….
- a) Ask if you can get in on the deal and buy some.
- b) Say you can’t. Blame it on compliance. Give him compliance’s home address.
- c) Say you’ll work on it. Quit, Move. Look into witness protection.
- You get a call from Big, himself. You never actually got a call from Big before. You know it’s Big because his voice sounds like a garbage disposal eating a plastic spoon. Since he does not want to register NJDI because he “don’t want no feds knowing his biznes”, he wants you to buy him a million shares of this pink sheet listed $.36/share company, Global Garbage, Inc. He says he expects to own it for a week until he “gets the word out”, at which time he expects to sell it for “large profits”. He offers you 5% of the action in lieu of commissions ($6.95). Big is your largest (in more ways than one) client.
WHAT DO YOU DO?
- a) Tell Big he’ll have to speak more clearly because you have a bad connection. Say “Hello” Hello” Hang up. Move (See 8 c)
- b) Tell Big great. By Global Garbage Inc first.
- c) Buy GGI and wait a week until you see big movement up. Sell your GGI and short all you can
- You have a client that wants an S&P 500 index fund. DO YOU SELL HIM THE VANGUARD FUND OR THE RYDEX FUND?
- a) neither because you think the market is going to Hell in a handbasket.
- b) Sell the one you make more money on/
- c) Send him to Scottrade. You can’t be bothered with this small stuff.
- Bond interest rates have gone back up to pre-90’s rates. A couple in their late 50’s want to generate some income for retirement. You can
- a) build an immunized bond portfolio that will throw off an average of 6% per year until the couple turn 66.
- b) you can put them into a managed portfolio of equities, with an average 2.5% dividend yield using only blue chip established companies.
- c) put them into a 5.25% front load total return fund that significantly outperformed the S&P 500 last year.
WHAT WOULD YOU DO.?
Seriously? You need a multiple choice for this one??
- You have a new high net worth client who is a picky, detail-oriented accountant and a tax lawyer wife.
After much scrutiny and criticism they reluctantly signed the new account paperwork. When you submit it, compliance bounced it because one acknowledgement on the bottom of page 11 had NOT been signed by the client. You cannot get the account opened for them until it is signed. WHAT DO YOU DO?
- a) Sign the damn paperwork and resubmit. Burn original
- b) Call the new client and say “Hay Bozo, you forgot one of the 22 signatures. Get your ass down here quick”
- c) Mail the new client an anonymous letter with a yellow “SIGN HERE” sticker on P. 11 and a paid return envelope to “Operations Manager”. Call the client and say the account is open and is doing great; thanks for the business. They should see some results soon.
The fact patterns in the questions are taken from ACTUAL questions we’ve encountered in our compliance consulting business. Names and identifying facts have been changed to protect the guilty. The answers are not real. Repeat another way: None are correct! In fact if you attempted to answer any of them and actually picked one of the answers we provided here, please apply for that opening at ShoesRUs in Paintball, Arkansas. Applications may be taken in person if the warden will allow you to get a paper through the mesh screen.
Fro REAL answers to the real compliance scenarios, please visit our SUBSCRIPTION side, at somebodyelsesmoney.com.