Pretty sad story reported recently…but sad, as in pathetic.
Guy Wyser-Pratte, who is known on Wall Street as a shareholder activist and runs a $500 million hedge fund, recently reported that the private banking operation of J.P. Morgan Chase had “somehow” allowed many small electronic transfers out of his personal account, over a period of time (15 months). Each transaction represented only several thousand dollars. However, the total of these withdrawals was more than $300,000. But these electronic transfers were not authorized.
Did he get all of his money back?
No. The end result of his saga, apparently will be a recovery of just $50,000.
Apparently, Mr. Hotshot Wall Streeter never bothered looking at his monthly bank statement. Look…if you don’t contact your bank or broker within 60 days from the date the statement is printed… you are essentially saying “I agree” with everything printed on that statement. And you probably won’t have a leg to stand on if you come back six months (or a year), later announcing some discrepancies found on your statement. The responsibility is yours.
Now, Wyser-Pratte claims that since he opened that account “years and years ago” he doesn’t recall signing a document agreeing to that “60 day” stipulation.
He’s right…he probably didn’t sign anything like that. But maybe he should look on the back of his bank statement! It’s usually written there…every single month. It ticks me off that some big shot takes his eye off the ball and tries to put the blame on someone else.
If you get a statement from a bank or broker — and you don’t do anything regarding a possible discrepancy you may find within 60 days from the date of this statement, you are accepting the statement as it’s printed. Essentially, you are out of luck. Please don’t tell me you are as careless as Mr. Hotshot Wall Streeter.
Didn’t this guy have someone reconciling his bank statements? Scary! Additionally, Wyser-Pratte states that the monthly statements have become so complicated he had trouble deciphering them. Wow! And he manages money for a living?
This is just one of the reasons why I encourage new clients to review their first few monthly statements with me. It’s important that you understand what’s happening inside your account. The first step is understanding how to read your monthly statement. Look, more and more transactions are taking place electronically. You supply your routing number and account number over the phone and you are giving the keys to your bank account to someone. It’s a little scary, but it’s 2008. We will have to exercise a little more diligence than we did yesterday, and it comes down to having a certain level of trust.
Or — is it giving away a certain level of trust? What are your thoughts?