ARBITRATION PANEL STUDY FINDS BIAS

On Wall Street, August, 2007 by DAVE LINDORFF

MARY JANE SCHWARTZ, A 62-YEAR-OLD RETIRED NURSE from Cohasset, Mass., went through a bad patch in her life. Her husband of 30 years had left her, and her mother had died. All she had left was her $1.6 million inheritance, which she invested with Merrill Lynch. For a time, her fund, which she says was invested 40% in growth stocks and 60% in income securities, did well. And at one point, it had reached $2 million, allowing her to live comfortably.

That, she claims, is when things turned bad.

Her broker was dismissed by Merrill, and she was shifted to a new person, whom she alleges advised her to switch to an aggressive strategy of nearly 100% equities-including, she says, stocks bought on margin. Then came the dot-com crash. Piles of margin-call letters later,...

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