WINNOW™ QUARTERLY UPDATE
Name: Michael C. Rud
Broker Currently Works For:
Median Brokerage, Inc.
Since the last report, have
we found out anything else about him?
Since the last report Mr. Rud
has started a new business called, Financial
Experts, LLC, and registered as an Investment
Adviser (see glossary) with the SEC.
Yes. Mr. Rud left Average Brokers,
Inc. in April 2007, and moved to Median Brokerage,
Inc. NASD records indicated that he was terminated
by Average. By the time we send you your next
Winnow report, more details of the circumstances
of the termination should be available.
Yes. Since the last report, two of Mr. Rud’s
customers have filed arbitration actions against
him alleging churning and unauthorized trading
(see glossary). Those arbitration actions are
pending. Future Winnow reports will contain
details about how those claims are resolved.
In addition, since your last Winnow Report,
two customers have completed IW surveys on Mr.
Rud. Those surveys are reflected in Mr. Rud’s
updated IW Score (see below).
In light of these developments,
Investor’s Watchdog recommends that the customer
review her account carefully for signs of unauthorized
trading and/or churning and bring any problems
to the attention of the Median compliance department
whose address is 1234 Trust Avenue, New York,
New York, 12345. If the customer needs legal
advice, IW can recommend an attorney experienced
in such matters. Call IW toll free at 866-423-WDOG
(9364) for a referral.
Since the last
report, has anything changed about Mr. Rud’s
Mr. Rud’s new firm, Median,
is an independent broker-dealer headquartered
in New York. Median has been sanctioned numerous
times in the past ten years, and twice since
the last Winnow report.
In June 2007, the U.S.
Securities and Exchange Commission
issued a cease-and-desist order against Median
for failure to properly supervise representatives
in ten branch offices nationwide. The SEC found
that Median’s representatives engaged in widespread
sales practice abuses including making material
misrepresentations to customers and using high
pressure sales tactics. The SEC fined Median
In July 2007, the NASD
censured and fined Median $750,000 for failing
to timely file 510 amendments to Forms U4 and
U5 which, if timely filed, would have put the
public on notice of 510 additional regulatory
actions or criminal actions by Median representatives.
In light of the forgoing,
IW has lowered Mr. Rud’s IW score to
44 on a scale of 40 to 80. This
is a thirteen point drop from the initial Broker
Safety Score of
57. A score of 40 indicates
a broker that, in IW’s opinion, the client should
avoid altogether. A score of 80 indicates a
broker who has been tested by bear markets and
yet has no customer complaints, no disciplinary
history, no negative information in the IW database,
and no areas that raise concern for a former
SEC Enforcement Branch Chief.*
*IW rates brokers on
a 40 to 80 scale with a higher score reflecting
IW’s opinion, based on historical information,
that the investor’s assets are safe from intentional
or reckless misconduct by the broker or his
firm. IW expresses no opinion on the value of
the customer’s investments or on the broker’s
investment selection ability. A single new fact
can radically change the IW score and indicate
a need for immediate action. For timelier notification
of red flags, please consider upgrading to IW’s
Winnow Plus™ service or Constant Patrol™ subscription.