Don’t Crash With Wall Street or [Es]Cheat Yourself

Letter to Romans: It’s defeatist to be a hopeless worry wart, but wise to keep an eye on your money so it doesn’t end up in someone else’s pocket. So, kindly beware of new UCC rules protecting “too big to fail” Wall Street firms or banks at your expense & old state escheat laws.

That’s the takeaway from opinion pieces warning folks about some legal pitfalls few realize exist. Consider the op ed titled, “Wall Street Could Seize Your Retirement Savings in the Next Financial Crash – and It’s Perfectly Legal.” It’s REALLY complicated but the bottom-line is that under today’s “Uniform Commercial Code” adopted by all 50 states, “most investors no longer directly own their securities. Instead, they hold what the law refers to as a ‘security entitlement.’” According to author Justin Haskins in a Fox News piece, “This arrangement is contractual in nature. It grants certain rights & protections, but it does not confer direct registered ownership. When you buy stock in a company you do not actually acquire the stock itself. You get a set of investment rights tied to that stock.” In other words, should the next financial meltdown occur, and it can happen however unlikely, Haskins warns getting your money back from “the most powerful financial institutions” may be no slam dunk for the lawyer you’ll likely have to hire to protect your stake.

In another Fox op ed, Carol Roth warns how, “The money in your ‘safe’ savings account could vanish overnight.” In this case, the author is talking about the importance of keeping an eye on your checking & savings accounts in your bank or credit union, especially those that you no longer “interact” with, e.g., make deposits and/or withdrawals from. That’s because state escheat laws can authorize if not direct an institution to transfer any money in such a so-called “dormant” account to the state for safe keeping; but, of course, getting that taking back can be easier said than done and you don’t want to go there with, guess, a costly lawyer’s help. Solution: “Interact” at least once a year with your accounts, i.e., at least periodically “update” or reaffirm your personal info on each account.

Davd Soul