Assumption of Command

10 February 2005

First Command (formerly USPA/IRA) is in trouble

OH BOY. This hits a lot of people I know.

COUNTERCOLUMN: Class Action Lawsuit Against First Command!

I'm not a lawyer, but the reasoning looks sound. They're going after First Command largely for unsuitability. And by comparing the SIP to the Thrift Savings Program, they're actually narrowing their argument to the point where they can quantify a typical opportunity cost that's going to be greater than the commissions paid into the program. It strikes me like a pretty solid and reasonable case. They aren't reaching for the moon here.

It's also significant that this is a class action suit, which means that they can circumvent mandatory arbitration with the NASD (Who fined First Command a paltry 12 million dollars. Pocket change for these guys), and get the case in front of a jury. Which also opens the door to some significant punitive damages, as well, I believe (maybe one of my lawyer readers can weigh in here.)

I would not want to be First Command here.

Here are some important links:
press release
The Law firm: scroll down for the complaint and an application to join the class