Waddell and Reed Financial Advisors

Will they are a retail brokerage firm. I bump into their customers occasionally and the skill/experience of the individual brokers varies from person to person (like every other firm).

-HW "Skip" Weldon Columbia, SC

Will,

I know they got into trouble a few years back, but I don't recall why. I think it had to do with inapporpriate trading. They got hit pretty hard for it by Spitzer. Since then I think they have turned a 180 and are super-compliance oriented.

They have been around for a long time but I have never met anyone that was a client.

On a completely worthless note, they call me once or twice a year trying to get me to leave my current job, but I have never actually met or spoken with them.

Kastnna

Since you mentioned that, I took a quick look around. Not just a single mess, but a couple of different ones, with different types of vehicles.

- Mutual fund timing/short term trading (1995-2003) enabled by Waddell & Reed, KS broker dealer, in Waddell & Reed mutual funds:

is probably the Spitzer reference) -- $50M to SEC ($40M disgourgement + $10M penalty) -- $25M reduction in fund fees over five years (Spitzer agreement - $5M/year) -- $2M to various states (violating Kansas securities laws) - KS got $145K, Alaska got $20K, etc. (settlement with states) (Alaska portion)

- Variable annuity switching (national campaign by W&R) 2001-2002:

-- $5M to NASD (fine) -- $11M to customers (restitution for losses incurred by switches) -- W&R broker-dealer registration in Missouri suspended W&R's public statement on the fund timing, and changes it has made (I note that they continue to point out that market timing is not prima facie illegal, which is true; however the complaint was that they favored certain customers): M* also points out that the mutual fund settlement does not name anyone at the firm responsible for the timing, nor does it require anyone to leave the firm. Makes one question how much housecleaning they're really doing. 9527 As of June 20, 2007, M* is also reporting that W&R is the only fund family not to even have an expected date for a settlement distribution plan proposal.http://advisor.morningstar.com/articles/doc.asp?docId198 Mark Freeland snipped-for-privacy@sbcglobal.net

This is what just happened to me, that's why I was posting. Thanks to you, Skip, and Mark for the info.

-Will