A Tale of a Broker, His Clients And the End of the Bubble Era

DALLAS -- When her husband died of a brain tumor in May 1999, Maria Walker, then 33 years old, was left with a two-year-old daughter, no job and few marketable skills.

But there was hope. The bull market of the 1990s was in full stampede. And Ms. Walker's money was in the hands of her late husband's friend, a Merrill Lynch & Co. broker named Brion Randall. Mr. Randall had promised his pal that he would take care of the widow.

While the market roared, she racked up monthly Visa bills that averaged more than $4,000. "You rock!" she told Mr. Randall again and again.

Need I say more? Never, never trust anybody totally with your money. Especially when you are obviously naive and juvenile and running up $4,000 VISA bills each month.

In reality (and law) the firms and the brokers have the responsibility to prevent their clients from making inappropriate investments. They have the right and the responsibility to refuse to accept inappropriate trades.

In this case, as described in the article, the broker was soliciting the trades. He was directing the accounts and the clients were simply agreeing to these recommendations.

The broker made inappropriate investment recommendations. The risk tolerance of an unemployed widow with a young child does not at any time allow for an investment concentration as described. The fact that she may have agreed with it does not release Merrill or the broker from their fiduciary responsibility to her.

It is easy today to suggest she should have known better, but that is NOT the issue. Merrill did know better and they did not properly moniter the activity of the broker. They tried to cover their rear by getting the clients to state they were happy with their broker and their accounts while they were making money. Merrill knew all too well that the trading activity and risk profile of the accounts was out of line.

The securities market is highly regulated partly to prevent exactly this kind of abuse of the clients.

The Investment banking and brokerage firms were much more responsible for the bubble market than the individual "greedy" investors. Their fingerprints are on everything that was bad about this bubble, from the fraudulent research to the rigged share pricing on the NASDAQ.

Frankly, I hope the clients are at least made whole in the arbitrations.

I wonder if these Lundys were any kin to J.T. Lundy? I haven't found any link.

Roger Clinton was asked to lobby for a pardon for horse breeder J.T. Lundy in exchange for secretly sharing profits in a lucrative business venture. Lundy promised Clinton a share of a the profits from a Venezuelan coal deal in exchange for Clinton’s help in obtaining a pardon for him. Lundy suggested a scheme whereby the payments to Clinton could be concealed by placing his share of the profits in Dan Lasater’s name. Lasater, who owned a 20 percent interest in the venture, discussed the possibility of a pardon for Lundy with Roger Clinton.

" A few of Mr. Randall's investors had Alcoholics Anonymous in common. He had been a recovering alcoholic since 1989. His wife, Ms. Walker and her husband were all recovering alcoholics. After AA meetings, Mr. Randall would occasionally pick up the tab for dinner. "Everybody would be howling" at his stories and jokes, Ms. Walker says. "

The name Alcoholics Anonymous should mean that it's members remain anonymous at the level of press, radio(tv), and film. It's one of the Traditions. Why is this guy dragging AA into his mess?

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