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considered inapproprtate lor retirees who are more concerned with generating income than accumulating additional
made more than $25,000 on Ms. Salatich's account. She withdrew approximately S189,000
assets because they often charge large
from her account during the 12 monthn
commissions and fees, among other things. Take the ease of 73-year-old Pat
Mr. McFadden was her broker, and when she shut the account she had just $73,000 left. She is currently living primartly off
Salatich, a nurse for 25 years at Exxon. In
her $1,500 monthly Sociul Security puy
2000, she says she entrusted Mr. McFadden with S565,383, of which $493,306 was placed in an Amertcan Skandia van-
ment. "I feel you should continue taking out $4,000 a month and enjoy yourself and let me worry about tile market," he wrote
able annuity. The selling point: the
to her in May 2001.
annuity had a death benefit, which would leave set amount to her heirs. As part of the contract she had to pay $4,91!0 a year
In its January notice to Securities America, the NASD raised numerous concerns about the supervision of Mr.
for scV(m yean; even though the benefit
1\kFa..ddcn, according to people who have
expired when she was 70. Mr. McFadden
reviewed the notice.
a
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David Spinar, the finn's chief compli路 ance officer, testified during the arbitration that the finn simply failed to verify
Mr, .TvTrFR.rlde-n's claims that he was a
certified public accountant in good standing. The NASD's January notice of possible civil charges also criticizes the firm's failure to review many trades, according to these people. At issue in the arbitration was the firm's inability to review thousands of trades Mr. McFadden made 1n the annuity accounts of the Exxon employees. Mr. Spinar testified during arbitration that this is a "fundamental difficulty" but uddcd Securities America is trying to
"crack that nut."
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