The Law Planet Blog

Jupiter, Florida">is a long way from Wall Street. Yet the financial explosions that have rocked that bastion of investment have had repercussions in Palm Beach County. Lessons, some new, some old, can be learned and repeated.

First, and I've said this before, your mother was right. If it's too good to be true, you should avoid it. Like a diet that says "eat all you want and lose weight" an investment product that has consistently high returns through all markets is likely a fraud. Nobody is that good.

Second, just because it's called a CD, doesn't make it FDIC insured. The Stanford investment product was called a CD, but the bank (in Antigua, of all places) was not FDIC insured. And it was not in the business of lending money at a higher rate. It was investing the money in whatever it felt like. That makes these CDs much more like shares in a mutual fund or investment partnership than a CD. And there was absolutely no FDIC insurance.

Third, another tribute to your mother. Don't put all of your eggs in one basket. There was a recent report of a professional athlete whose entire liquid net worth was frozen by the SEC's action against Stanford. At one point he was quoted as saying that all he had was the $13 in his wallet. Don't let this happen to you.

Finally, trust but verify. In my opinion, part of what made these alleged scams so successful, was the beautiful public face they put on. Who would believe that Madoff, a now-former scion of the securities business, was engaging in the wrongdoing he has admitted? Stanford spent millions building its brand in the arts and sports. But no one bothered to check on how the books were kept or who the auditors were. It turned out the auditors may have been ill-equipped, or fraught with conflict, when it came to these large clients. The SEC said that the Stanford Bank's auditors in Antigua didn't even answer the phone.

Diversify, examine and think. This will provide you with most of the tools to protect yourself from scammers.

That's the view from The Law Planet -- Jupiter, Florida.

I just spent the weekend using the Xlink BTTN bluetooth adapter. And if this device doesn't scare landline-based phone companies, I'm not sure what will.

I'm a Bluetooth addict. I have three Bluetooth headsets. All of my cars have BT hands-free kits. Even my laptop has Bluetooth. The interconnectivity it provides is very useful, although the implementation is sometimes clumsy.

I got to wondering why I was paying for a home phone line when only telemarketers use it (and my mother, but she's got a cell phone she can use, too.) So I started thinking that I should become part of the growing group of people who ditch their home phone for their cell phone. Then I wondered if there was a way to hook up my cell to my existing 6-handset DECT cordless phone system. I found two devices and decided, based upon my review of the specs and web information, that the XLINK was for me.

It comes in two flavors, BT and BTTN. The BT is for cell phone integration only. The BTTN adds the ability of integrating a landline as well. Since the phone company reduced my monthly bill to a price where it made sense to keep the landline, I bought the BTTN. It took less than 10 minutes to set up the unit and pair two phones.

But the real beauty is the upgrade path. Yesterday I downloaded the upgrade "wizard" software and connected the BTTN to my laptop. Everything worked great and, in about ten minutes, the software had been upgraded. And the sound quality, which was OK, had improved dramatically.

While I haven't cut the cord completely, at least I'm not running all over the house looking for my cell when it starts to ring. A caller rings my cell and all six of the handsets ring. And the caller has no idea that they're not talking to me on my cellphone handset.

The Xlink. These guys are brilliant.

That's the connected view from The Law Planet - Jupiter, Florida.

I have mentioned in the past that my distaste for Equity Indexed Annuities runs deep. I wondered aloud how a market-based product could be sold by someone with a securities registration. I would like to think that the SEC cares what I think, but I would be wrong. However, SEC Rule 151a went into effect in December and the Index Annuity folks are hopping mad.

They have a website, SEC151a.com, to plead their case. But what struck me most when reading their materials is the first page, which encourages its members to not get registered with either a Series 6 or Series 7. The authors of this site are discouraging people from the additional oversight that having a supervising broker/dealer would bring. Of course, that would likely mean another layer of overrides and reduction in income.

In my view, it would also lead to fewer inappropriate EIA sales. When I last blogged on this topic, I received an email from an annuity marketer taking me to task for blasting this "wonderful" product. It was all I could do to prevent myself from laughing (actually I did laugh). It's real simple in my mind. If you're selling something that relies on the stock market's performance to determine the performance of the underlying investment, you should be registered to sell securities.

Start sharpening your pencils, folks, and please bubble inside the circle only.

That's the view from The Law Planet, Jupiter, Florida.