Quatloos!

To set the stage, a young man wins a $336 million mega millions jackpot in '09. He takes a cash payout, pay his taxes and walks with $70 mill. He hires two financial advisers to help him with his ducketts. They do, right into their pockets...

http://finance.yahoo.com/news/lottery-w ... 28218.html

A young, unmarried grocery store worker, with no children, won half of a $336 million Mega Millions jackpot and did just that: bought a $100 million life insurance policy. Now he is suing the financial advisors who sold him the policy, along with other investments that encouraged him to "assume tens of millions of dollars in debt," according to the Courthouse News Service.

There's no law preventing adults from signing stupid contracts. You're of legal age and not under duress, so you can spend your money on any legal product you choose to buy. If you make a stupid investment by cashing out your 401k to buy Arizona beachfront property, and the seller makes all the legally required disclosures, the fault is yours.

People seek a second opinion all the time when a doctor proposes treatment. There was nothing stopping this guy from doing the same with his financial advisors. He certainly was able to afford to buy an hour's time with every broker in town, if he'd wanted to. Yet I'm sure he'll tell you he signed the contracts willingly because he just felt extremely comfortable with these guys and saw no need to question their advice.

And now he wants to be protected from his stupid decisions? This can't go well.

Yes, he is an adult, and yes, he is presumed to be competent. However-- This is right up with selling a "lifetime annuity" to a person who is 80 years old when the annuity does not start to pay out for another 20 years. There ARE levels of financial fraud that, if not regulated against, should be.

LaVidaRoja wrote:Yes, he is an adult, and yes, he is presumed to be competent. However-- This is right up with selling a "lifetime annuity" to a person who is 80 years old when the annuity does not start to pay out for another 20 years. There ARE levels of financial fraud that, if not regulated against, should be.

I see your point but I don't agree. This lottery winner is described as a young man.

You're comparing the lottery winner's muddle to an elder-abuse implied duress situation, wherein someone takes advantage of an elderly man's limited vision making him unable to read and understand the fine print, and reduced reasoning capacity making him unable to add 80+20 and comprehend the implications. It's not the same.

Of course the lottery itself is sometimes described as a tax on the poor. They're willing to pay the government hundreds or thousands of dollars a year on the unlikely chance they can get a free ride out of poverty, not realizing that if they'd invested the same amount they might have bought their own way out. The same lack of education which made too many of them poor in the first place means that too many winners don't recognize the financial vultures hovering overhead.