Quote, as it appeared in AMNews, did not accurately reflect my position

LETTER — Posted July 10, 2006

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Regarding "Looking for a financial adviser? Beware these red flags" (Column, June 12):

I am quoted in your article as saying, "Even though it's someone you trust, and even if your account is doing well, [it's important] not to ignore red flags, because ultimately the responsibility comes down to the investor."

The construction of the quote makes it appear that I was saying it is the investor's ultimate responsibility to ensure misconduct does not occur with respect to his or her investment accounts.

That is not something I would contend because it is not something I believe. If that was true, the legal system would offer no opportunity for an aggrieved investor to obtain meaningful relief against a financial adviser who engages in misconduct.

The truth is that investors who have suffered losses due to broker misconduct can recoup wrongfully-caused losses through arbitration or, in some cases, litigation.

I agree that investors certainly should be aware of potential red flags in order to protect themselves against losses, and I believe articles such as yours help educate investors. Unfortunately, an article that leaves the wrong impression of who bears ultimate responsibility for a broker's misconduct risks losing much of the good it otherwise achieved.

An investor's failure to recognize these warning signals does not mean he or she is "ultimately responsible" for any resulting losses.

Such responsibility belongs with the financial advisers and brokerage firms who engage in wrongdoing with respect to their customers' investment accounts.

Laurence M. Landsman, Chicago

Editor's note: Landsman is a partner with the Chicago law firm of Block & Landsman.

Note: This item originally appeared at http://www.ama-assn.org/amednews/2006/07/10/edlt0710.htm.

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