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Russell, re: access to your account, or any of ours for that matter. Here is
a personal story colored by my perception of reality: I am no legal beagle.
You make your own call.
A friend of mine, a pilot, retired from one of the major airlines about 6
years years ago. He put his money from a 401K (about $1.5 million) in a safe
place, so he thought, with a big firm, based on a pitch from a broker. A
month later he got a call from another broker requesting his business. “Sorry,
I have my money with “---”. “Oh?, I heard they went bankrupt last week.” ?
--- / ? oops. . . yikes !!!
The facts: Yes, the firm had gone bankrupt. NO, the firm had not informed
their client.
Luckily, he had his funds in a personal account with them with no order for
further distribution or investment. Did he have access to funds in his own
account? NO!! (If you think about it, who is going to write you a check or
authorize a wire transfer.)
The bankruptcy court froze all accounts with that firm. Even 5 months
after the fact, he still did not have any access. He hired a lawyer (one of my
relatives) who had connections to some of the big banks and legal firms. He
had to file letters, prove source of funds and distributions; and finally,
certifications of hardship to even get access to a distribution of about a few
thousand a month, and even that was on an ad hoc basis. He was finally able to
get his money in a little less than a year. My friend showed me the letters
and paperwork - Wow!!!
Larry Z. Seattle
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