Question

Ms. Newbie is a newly-minted registered representative. Mr. Oldman saunters into her office, becomes infatuated with her, opens an account, and signs a document giving Ms. Newbie discretionary authority over the account. Mr. Oldman is 68 years old, retired, lives on a fixed income, and pays taxes at the lowest marginal tax rate available. His stated investment objectives are capital preservation and income. Ms. Newbie invests ¼ of his investment monies in a periodic-payment, deferred, variable annuity. Based on these facts:

Accepted Answer

Ms. Newbie may lose her license before she gets started in the business for making an unauthorized transaction.

Answer

Ms. Newbie has done a remarkable job as a newly-minted representative of allocating at least a fourth of Mr. Oldman’s funds appropriately.

Answer

Ms. Newbie has a reasonable sexual harassment case against Mr. Oldman for putting her in such a position.

Answer

Although Ms. Newbie’s asset allocation for Mr. Oldman is less than optimal, she is in no danger of losing her license or any other penalty, given that she has been given discretionary authority over the account.

Ms. Newbie is a newly-minted registered representative. Mr. Oldman saunters into her office, becomes infatuated with her, opens an account, and signs…

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